Southland District Council is seeking help from central government to resolve long-term issues around the provision of affordable and sustainable energy on Stewart Island / Rakiura.

At its final meeting of the 2019-2022 triennium in Te Anau yesterday, Council approved unbudgeted expenditure of $709,475 from the Stewart Island Electricity Supply Authority (SIESA) reserves to cover a shortfall in funding for diesel to power the island’s electricity generation plant.

The fuel budget is set and established through Council’s Long Term Plan (LTP) process. Historically these budgets have included CPI adjustments. However, the Russian war in Ukraine and global pandemic influences have resulted in unprecedented increases in the price of diesel, meaning the current LTP budget is insufficient to meet current pricing.

Without the extra funding, it is projected that the island’s current fuel budget for 2022/2023 will run out in November 2022. SIESA has $1.8 million in its reserves. If, as predicted, diesel prices continue to rise the reserves could be exhausted by May 2024, leaving the island without any means to fund further diesel generation of electricity.

Council commercial infrastructure manager Stuart O’Neill said this could severely impact power supply to residents and businesses that support tourism and other commercial interests on the island.

At an extraordinary meeting of the Stewart Island / Rakiura Community Board on Monday, 3 October, the board recommended a 5% increase in the rate per unit and night rate per unit paid by island electricity consumers, to help lessen the drain on SIESA reserves. However, the board acknowledged that this was a “short-term fix”.

Council has engaged consultants Morrison Low to develop a strategic and economic business case exploring possible long-term power supply options, which would be discussed with Stewart Island/Rakiura consumers and local stakeholders.

Staff are also engaging with the New Zealand Infrastructure Commission Te Waihanga, which is now advocating for Stewart Island power consumers by providing assistance in developing the strategic guidance for an alternative power source. This business case is expected to be released for consultation early in 2023.

There was a genuine commitment to work closely with the Stewart Island/Rakiura community to achieve a positive outcome, Mr O’Neill said.

Meanwhile, Council staff have begun discussions with central government to seek a long-term solution.

Investigations into the alternative generation from renewable energy sources have been ongoing since 2008. To date a viable and affordable alternative has not been identified.