In a nutshell
- Financial Summary information from Aurora Energy’s Annual Report for the year ended 30 June 2023:
- Total assets $805 million
- Capital expenditure $99 million
- Net profit $11 million
- Projected debt $576 million by mid-2025
- Planned investment in the network in the order of $800 million over the next decade (based on Aurora Energy’s Statement of Intent for the year ending 30 June 2024.)
In more detail
Aurora Energy owns and operates the regulated electricity distribution networks for Dunedin, Central Otago (including Wanaka) and Queenstown. It had 94,723 customer connections in 2023.
The company owns and manages the local network of poles, power lines, underground cables, substations, and other equipment that distributes electricity from Transpower’s national grid to power communities, in Dunedin, Central Otago, Wanaka and Queenstown.
Aurora coverage map - shows the parts of the Otago region covered by Aurora
Aurora Energy’s network was largely built in the 1950s and 1960s and requires ongoing renewal and development to meet growing electricity demand. Over the intervening decades and prior to 2017, investment was kept lower than was required which led to deterioration of asset condition and a backlog of renewal work. This is being addressed through the current Customised Price-Quality Path (CPP). This investment has impacted recent profitability.
The Dunedin population is growing, and alongside current and forecast population growth in Central Otago and Queenstown Lakes enhanced infrastructure and new connections will be required. More generally, the electricity distribution sector is facing a significant sector-wide step up in network investment due to decarbonisation (electric vehicle requirements, process heat conversion, etc) and increased resilience requirements, meaning that cashflow pressures will continue and will impact the ability of Aurora Energy to pay a regular dividend.
Aurora Energy returns
The group of companies, which includes Aurora Energy, pay a dividend to DCHL. Currently DCHL, after paying its costs, then provides investment income to Council. Chart one below shows the dividends paid by Aurora to DCHL. It shows that Aurora Energy has not paid a dividend to DCHL since 2017.
Chart One - Dividends paid by Aurora Energy to DCHL
The graph shows the Aurora dividends paid to DCHL
| (figures are in $millions) | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| Dividend | 12.0 | 7.1 | 8.8 | 4.8 | 4.8 | 3.0 | 1.5 | nil | nil | nil | nil | nil | nil |
| Total | 12.0 | 7.1 | 8.8 | 4.8 | 4.8 | 3.0 | 1.5 | nil | nil | nil | nil | nil | nil |
Chart two shows income received by Council from DCHL. Council has provided an interest-bearing shareholder advance to DCHL of $112 million, which has an associated annual income stream, currently $5.9 million.
Chart Two - Investment income received by Council from DCHL
The graph shows the investment income received by Council from DCHL
| (figures are in $millions) | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 |
| Dividend | 5.5 | nil | nil | nil | nil | nil | nil | nil | 4.6 | 3.7 | 4.6 | 10.8 | 15.9 |
| Interest | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 6.7 | 5.9 | 7.2 | 7.6 |
| Total | 11.4 | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 5.9 | 10.5 | 10.4 | 10.5 | 18.0 | 23.5 |