Tag: Vector

Time for New Leadership at Vector

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We should not get use to power failures

 

While the investigation goes on into what caused the fire at the Penrose Substation and the resulting three-day blackout on the Eastern Isthmus of Auckland it seems we need a new Chairman, and CEO of Vector – the lines company that delivers the juice to residents and businesses across Auckland.

From the NZ Herald

Get used to power cuts, Vector chairman says

6:20 AM Thursday Oct 23, 2014 – Bernard Orsman
Power cuts are a part of life and Aucklanders should get used to it, says Vector chairman Michael Stiassny.

Vector bosses spent much of yesterday’s annual meeting in Auckland discussing the fire at a substation in Penrose on October 5 that cut power to 85,000 customers.

Mr Stiassny and Vector chief executive Simon McKenzie were unable to say what caused the fire until an investigation was completed, possibly early in the new year.

Only then, Mr McKenzie said, could the company discuss compensation for households and businesses, some of whom were without power for several days.

Compensation could take the form of the “Vector promise” of $50 for households and $200 for businesses. It would be premature to speculate on compensation above that, he said.

Coralie van Camp, a Vector shareholder and longtime critic of the power network company, told the meeting that people could have died due to poor maintenance at the substation.

She criticised Vector for paying out too much in dividends instead of investing in maintenance.

Mr Stiassny called it a serious incident that could have been worse, but said the company and electricity users could not afford a gold-plated network.

It would cost $500-$600 million for Vector to upgrade each of its 14 substations to achieve reliability above 100 per cent. State-owned Transpower, which provides bulk electricity to Auckland, would have to spend more, he said.

The company produced figures showing people in the affected areas had 99.8 per cent reliability of power in the past 15 years.

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Source and full article: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11346810

 

$600 million to so-called gold plate the network which actually translates to a power network that rivals the European Union, parts of the USA, and Japan where they don’t get such systemic failures (if they do they are super rare unlike ours which is about every 2-4 years). That is around six years worth of those AECT dividends that you get in your letter box around September each year if we calculate the current dividend out at $335/household.

So the question you need to ask yourself is the following:

  • Still want that dividend and risk the major failures we get every two to four years and throw out what food you had in the freezer?
  • Forsake the dividends for three years to fund 50% (and Vector uses other sources to get the other 50%) and bring the network up to EU standard where such failures would be super rare

 

Getting our network up to the specifications similar to the EU where we have redundancy capacity ample enough is not gold plating, it is good investment and good business. And if the Vector Chairman, CEO, and Government Energy Minister can not see that then they all need to be sacked immediately.

Consider ourselves lucky we do not operate large Nuclear Power Stations which are reliant on an external feed to keep the reactors online. As the USA and Canada found in their last cascading failure when you lose the external feed the reactors need to be shut down for safety reasons making the power situation worse as you take more supply offline….