Auckland power back by morning - Vector

Power should be restored to all Aucklanders by 7am tomorrow, bringing an end to two days without power for thousands of people, lines company Vector says.

Thousands of Aucklanders had two nights without electricity as technicians raced to restore the supply following a fire at Transpower's substation yesterday which cut power to dozens of suburbs.

The company said St Johns, Meadowbank, Orakei, Mission Bay, Kohimaramara, Stonefields, and St Heliers should have had their electricity restored late this evening.

Sylvia Park was expected to have supply back to normal by 1am, Carbine Road and Otahuhu should be switched on by 3am and Mt Wellington by 4am. Remuera is expected to have power by 7am.

Prime Minister John Key warned electricity prices might rise if an inquiry into the Auckland blackout found Vector's network needs upgrading.

Mr Key said there needed to be an inquiry not only into what went wrong but also into whether the network had enough redundancy, or spare capacity, to cope with such an event. He warned electricity prices might rise if the inquiry found Vector's network needed upgrading.

Upgrades to the national grid and local infrastructure by power companies had been the main driver of electricity price rises in the past six years, Mr Key said.

"Now that might end up being the right thing to do with Vector, that they do ultimately invest more, but my only point is that I know people will say 'deliver me the gold-plated solution' but the gold-plated solution has implications for consumers."

Mr Key said Vector's first focus would be on getting the power restored to but that it was necessary after an event of this scale to see if there were lessons to be learned.

Energy Minister Simon Bridges has asked for advice on what sort of inquiry will take place.

The fire along a 200-metre stretch of underground cable at the Penrose substation early yesterday morning initially cut power to about 85,000 homes and businesses. Retailers were forced to shut up shop, traffic lights and mobile networks were knocked out and hospitals and rest homes ran on back-up generators.

Vector chief executive Simon MacKenzie said the company would consider reconfiguring its Penrose substation, so its underground power cables had more separation.

Ten cables, all in the same trench, have to be fixed after yesterday's fire, he said.

The site of the fire was congested, and difficult to get in and out of.

"It's obviously something we'll be asking ourselves. A lot of these cables have been there for a good while, they're in good condition, but it's also dependent on the other assets that Transpower has in the area," Mr MacKenzie said.

"I don't know off the top of my head where else they could be run. We'd have to discuss that with Transpower."

The fire was in the trench but it was not yet clear where it started or what started it, he said.

Infrastructure Council chief executive Stephen Sellwood said the Auckland power cuts could have been prevented if consumers were prepared to pay more for their electricity.

Line companies were often reluctant to invest the money improving their infrastructure because consumers did not want to pay for it, he said.

"That's the challenge. If you want to keep prices down, then one of the ways you can do that is to defer some of the capital investment that might otherwise be needed to provide a resilient infrastructure network."

Vector tried to establish a second substation for Penrose but faced opposition from community members who did not want it in their backyard, Mr Sellwood said.

Compensation request

Fletcher Building general manager Philip King said the blackout had cost it millions of dollars and it would like compensation from Vector.

The company was one of the country's biggest companies and lost power to 26 of its sites, including manufacturing plants, distribution centres, retail stores and its head office in Penrose.

Mr King said the cut had been hugely disruptive and should never have happened.

"This is disappointing, frustrating and embarrassing," he said.

"The question you have to ask is where is the redundancy. If you have a problem there, where is the redundancy in the network for supply of power and alternate network means."

St Heliers Fruit Shop owner Kamal Duggal said the power outage would cost him thousands of dollars worth of ruined ice-cream.

The show topped up its ice-cream every Friday, ahead of the weekend rush, and Mr Duggal said it was likely he would have to throw out nearly $5000 of ice-cream.

Mr Duggal said he bought his shop only six months ago and did not have insurance cover.

Paymark estimated the power cut cost Auckland retailers about $4.3 million in lost sales on Sunday alone.