Transpower probe may open way for compensation over pylon debacle

The Electricity Authority has confirmed it is investigating national grid operator Transpower following the collapse of a pylon earlier this year - potentially opening the door to compensation for power users.

The investigation was revealed by Northland MP Grant McCallum during Wednesday's announcement of a $1 million fund, set up by Transpower and its contractor Omexom, to support projects with long-term benefits for Northland's economy.

McCallum described it as a "goodwill payment" rather than compensation, which neither company was legally required to pay.

The investigation is unrelated to the payment and is separate from an Electricity Authority report into the toppled pylon released last month.

McCallum said the Electricity Authority investigation focused on alleged breaches of the Electricity Industry Participation Code by Transpower, specifically failing to maintain assets according to good industry practice.

He said an investigator appointed to look into the alleged breach would make a recommendation to the authority, which would then decide whether to lodge a complaint with the independent Rulings Panel.

The panel had the power to order penalties of up to $2m and could also make compensation orders.

"It's a very rare thing that happens, so we'll just have to see how that plays out … the whole experience has been inexcusable," McCallum said.

McCallum, along with the Northland Chamber of Commerce, had been pushing Transpower for a substantial sum in compensation, though the MP acknowledged that would have a downside for consumers.

"In a perfect world, all the businesses would get compensated … But under the Act, Transpower doesn't have to guarantee the electricity supply, because that would lead to a much more expensive electricity system, and we'd all pay for that in our power prices."

Transpower acting chief executive John Clarke confirmed the Electricity Authority was looking into an alleged breach.

"As far as I am aware they have started an early investigation to see if there has been a breach of the code. It's very early days to speculate on what the outcome might be."

Clarke said WorkSafe had also made enquiries but had not requested any interviews with the workers involved.

"I'm not sure they are going to go further than they have at the moment … we are incredibly fortunate that nobody was harmed," he said.

A spokesperson for the Electricity Authority said an investigation notice into an alleged breach of the Electricity Industry Participation Code was issued on 16 September.

The notice set out the breach and required a response from Transpower within 10 working days.

The investigation was independent of the authority's report to the Minister for Energy, which aimed to understand the cause of the collapse and prevent similar accidents in the future.

The pylon was found to have fallen on 20 June after unsupervised and inadequately trained contractors unbolted three of its four legs at once, cutting power to the entire Northland region.

The cost to Northland businesses was estimated variously at $37.5m, $60m and $80m.