The AECT was formed as part of reforms to the electricity industry in 1993. As part of these reforms, the Auckland Electric Power Board became a company called Mercury Energy.
Along with 29 other energy trusts throughout the country, the AECT was established to ensure that the power lines remained in the control of electricity consumers. The AECT was set up on behalf of electricity consumers in the area that used to be served by the Auckland Electric Power Board.
In 1998, the government made more changes to the industry, including splitting the energy sector into lines companies and retailers. This resulted in the retail business of Mercury Energy being sold to Mighty River Power (a state owned enterprise) and the lines business being retained and named Vector.
In 2002, Vector acquired UnitedNetworks, the lines company operating on the North Shore and in Waitakere.
The Auckland Energy Consumer Trust retained 100% ownership of Vector until 2005, when we agreed to Vector’s initial public offering, or share float, of 24.9% of the shares in Vector so it could raise money to buy gas company NGC Holdings. (Vector has since gone on to invest in other businesses too.) The result of this share float, and a subsequent buy back of shares in 2009, is that the AECT holds the majority of Vector’s shares, currently 75.4%. This ensures that the AECT has a controlling interest in Vector.
How the industry is structured
To find out more about energy trusts in other parts of New Zealand, click here.
Keeping the power in Aucklanders’ hands since 1922
The AECT has only had guardianship of Vector on behalf of the Auckland community since 1993. However, the idea of community ownership of Auckland’s power network goes back much further than that. The Auckland Electric Power Board was set up in 1922 as a consumer-owned utility. (Before that, electricity distribution was looked after by local councils.) Even back then, the AEPB’s founders understood the value and importance of electricity supply to Aucklanders, and this model of guardianship of electricity distribution for the good of the entire community continues today with the AECT.
To find out more about the history of the AEPB (and electricity in Auckland in general), see the book “Sign of Service: A history of the Auckland Electric Power Board” by Jennifer King, available from the Auckland Public Library.
NZIER report concludes Aucklanders better off with Trust
In 2006 the New Zealand Institute of Economic Research compared Trust ownership of Vector with four alternatives (local council ownership, management by a professional trust company, handing shares over to beneficiaries, local councils and the Auckland Regional Council, and transfer of shares to a new regional infrastructure body).
On every measure, including efficiency and what was best for energy consumers in the Trust area, the NZIER concluded that the current setup is the best option.
