The New Zealand Commerce Commission has taken action against Alpine Energy, a South Canterbury-based electricity distribution company, after discovering that the company overcharged its customers by $16.9 million due to an accounting error. The Commission has issued a formal warning and negotiated enforceable undertakings to ensure that the affected customers are refunded and that the company takes steps to prevent similar issues in the future.

Commissioner Vhari McWha emphasized the importance of returning the overcharged funds to consumers and highlighted the additional commitment from Alpine to invest at least $1.5 million in community initiatives aimed at improving access to electricity. This decision reflects the Commission's understanding of the essential nature of electricity services and the potential hardship caused to consumers by the error.

The overcharging occurred because Alpine provided incorrect information regarding its depreciation calculations, which led to an overstated maximum allowable revenue. This resulted in customers being overcharged for the lines components of their electricity bills from 2015 to 2024. As part of the enforceable undertakings, Alpine is required to refund current customers, establish a program for former customers who are eligible for refunds, and prepare an improvement plan to mitigate future risks.

In addition to the refunds, Alpine has adjusted its pricing to address the impact of the error. The Commission believes that the outcome achieved through these undertakings is more beneficial for consumers than a court-imposed penalty, which would not directly benefit the affected customers.

Alpine Energy operates as a regulated monopoly under the Commerce Act 1986, which aims to ensure fair pricing and quality of service for consumers. The company is subject to price-quality regulation and information disclosure requirements, which are designed to limit excessive profits and encourage innovation and investment in the electricity sector.