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The BulletinSeptember 1, 2018

No, it’s not a scam: Why Vector is sending you a cheque in the mail

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The letter you got saying a cheque was about to turn up wasn’t from a Nigerian prince. Vector’s Beth Johnson explains how the Loss Rental Rebate system works.

A month or so ago, if you live in Auckland and you’re the person who pays the power bill, chances are you received an email from Auckland electricity provider Vector, which looked like this:

Now, normally people have little issue with some unexpected money coming their way, so as expected, most replies we got were from happy customers.

But not everyone was convinced Vector’s intentions were pure, and we got some colourful responses to our email.

Fair enough. Normally when people are approached out of the blue about receiving money for doing nothing, the scammer radar kicks into gear looking for the hidden strings attached.

But we also had replies from people genuinely confused about why we were getting in touch, adamant that they were with another power company, not Vector.

So from this week, when the cheques we promised in our email start to arrive in your letterbox, we thought we’d better explain a little further who we are and why we’re sending you money.

How the electricity sector works in New Zealand

Vector is Auckland’s energy distributor. We own and operate networks which distribute gas and electricity throughout the region. If you live in Auckland and you use electricity, then you’re a Vector customer.

A key distinction to know is that Vector doesn’t make the electricity we provide, nor do we sell it.

Power from generators (names you might have heard like Genesis Energy, Meridian Energy, Mercury, Contact, and Trustpower) travels across the national grid (the government-owned Transpower) then onto our network to reach your door in Auckland. The power is sold to you by big companies like, again, Genesis, Meridian, Mighty River Power, Contact, and Trustpower (they both make and sell power) and smaller retailers like Flick, Electric Kiwi, and Energy Club.

As an electricity distributor (there are 29 of us throughout New Zealand), Vector carries electricity from the national grid and sells our services to retailers, who bundle together our costs with their own and sell that power plan to you.

This payment is not like the other

Typically, you rarely hear from us. Retailers are the go-to contact for questions about power plans and the like. But when there is a power outage, that’s usually because there’s an issue on our network (either caused by a car crash, falling tree branches in bad weather, or something else), and we’re responsible for fixing it. We usually only talk to you directly when there’s news about a power outage.

Other times we’ve been in contact with you, you may not have even realised it. I’m talking about the annual dividend Aucklanders receive from an organisation called Entrust. They’re the major owners of Vector – they hold 75.1% of shares in us. If you live in Auckland, Manukau, northern Papakura, and eastern Franklin, you a beneficiary of Entrust.

When Vector pays out an annual dividend to Entrust, Entrust then passes almost all of that money on to you. Last year, each beneficiary received $350.

Loss rental rebates

The $30 that Aucklander power bill payers are about to receive from us is their share of the loss rental rebates (LRRs) – which is the surplus created once the costs in the electricity wholesale market have been worked out. We receive this as a credit note from Transpower.

Previously, we’ve passed this on to energy retailers, with an expectation that the benefits are then passed on to those whose names are on the power bill on our network.

This year, we’ve made the call to make this process more transparent and instead of passing the credit back to retailers, we will return $16 million directly to account holders. To us, this change is about ensuring a fair deal for Aucklanders when it comes to electricity expenses. So that’s why we emailed to say you’re getting  30 bucks, which is your fair share.

If you’re part of the Entrust district in Auckland, the refund will come with your dividend payment in September, so payment will be via direct credit, cheque or bill credit, depending on which method you selected to receive your dividend.

If you’re on the Northern network, payment will be via cheque in August.

If you’ve got questions about this LRR payment (or wondering why you haven’t received one), more information is available here.


This content is brought to you by Vector. If you live in Auckland, they also delivered the power you’re using to read it. And they’re creating a new energy future for all of us, as showcased by the incredible Vector Lights in partnership with Auckland Council.

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