The AECT was established to ensure that the power lines remained in the control of energy consumers, following the NZ electricity reforms in 1993. As part of those reforms, instead of each relevant Auckland household owning a small bunch of shares in their relevant power lines company (in our case, Vector), customers in Auckland City, Manukau City and parts of Papakura became the beneficiaries of a new trust (AECT). It is AECT that now holds the majority (previously all) of shares in Vector on trust for these customers.
This approach (holding shares in a trust) was not adopted everywhere – in some areas, shares were issued directly to households rather than held in trust. In 2006 the New Zealand Institute of Economic Research (NZIER) compared trust ownership of Vector with alternatives, including handing the shares over to beneficiaries. On every measure, including efficiency and what was best for energy consumers in the trust area, the NZIER concluded that the current setup involving AECT is the best option.
In my view, the trust structure gives us, as Auckland energy consumers, an advantage. First, it means that we, as a collective group are able to make effective decisions which benefit us as a group in the short, medium and long term (and if we don’t like what the trustees are doing, we get to vote them off once every 3 years, in the same manner as other public elections). Importantly it also means the shares are held on trust not just for the benefit of current energy users, but futures energy users too – would you be benefiting today, if the shares hadn’t been put into a trust back in 1993? When something is as important as ensuring reliable and safe electricity supply, why hand over control for short-term gain?
Under AECT ownership, Vector has grown from a local power lines company to become one of New Zealand’s most innovative energy and network companies, investing in leading-edge technologies including smart metering, fibre optics and wind power. Take a look at the Vector website here to see the assets that Vector (well, you, actually) now own.