Wellington, Jan 26 NZPA - The question of compensation will be addressed as an investigation is launched into yesterday's extensive power outage in the northern region.

Power was lost to more than 50,000 Auckland and Northland homes, traffic lights were out, and some businesses were forced to close when pylons sparked a fire in trees on a Waikato property about 4pm.

The fire caused a fault on two of the transmission lines that feed the region. With the Otahuhu power station out of action for maintenance, Transpower declared a grid emergency and called on electricity retailer Vector to reduce pressure on the network by implementing rolling outages.

The five-hour outage came less than a year after a transformer failure cut power to 70,000 Auckland customers.

Electricity retailer Vector said it had not yet decided whether it would compensate customers or seek compensation from Transpower over the outage.

"In these kind of circumstances there is not usually compensation made," said chief executive Simon Mackenzie.

The matter would, however, be canvassed as part of the investigation into what happened.

Meanwhile, Auckland City Mayor John Banks slammed the region's power supply as "third world".

The disruption was the result of "under-investment, callous disregard by Government, and reckless management by Transpower," he told the New Zealand Herald.

Newmarket Business Association chief executive Cameron Brewer said half the suburb's businesses had been affected.

"Power cuts seem to have become a regular event in Auckland and it's fast becoming beyond a joke."

A war of words has broken out between the farmer who owns the land where the fire broke out and Transpower chief executive Patrick Strange.

Steve Meier blamed Transpower for yesterday's cuts, saying he warned the company five years ago that a fire on his 13ha property at Matangi, near Hamilton, would happen.

Mr Strange said Mr Meier had obstructed the company when it had sent staff to trim the trees back from the pylons.

Transpower said delays occurred yesterday as it had to get an armed police escort in order to access the farm and put out the blaze.

Mr Meier said Transpower took two hours to turn off the power to allow firefighters to safely tackle the fire.

Mr Meier has fought a five-year battle, along with about 50 other landowners in the area, upset at the company's refusal to pay for easement rights for hosting its structures.

Mr Strange said Mr Meier was the most difficult person in the country to deal with.

Transpower has a right under law to enter properties to undertake maintenance work and has no legal obligation to compensate landowners as long as no "injurious effect" results.

Mr Mackenzie said that power companies still encountered difficulties accessing some private land to undertake maintenance work.

"It's something that does need to be looked at."

If there were extra lines coming into Auckland and alternative power generation close to city yesterday's problem would not have been so serious, he said.

Energy Minister Gerry Brownlee said the outage was caused by "a bad set of circumstances", which started with the fire but was compounded by the Otahuhu power station and two other circuits being out of action for routine maintenance.

"There was a multiplicity of reasons (for the outage) and the way to fix it is to have the new high tension lines through the Waikato built as quickly as possible," he told Radio New Zealand.

Mr Brownlee said Mr Meier's version of events was only "one side of the story".

"There is overdue maintenance in the transmission group from one end of the country to the other and that's about previous government neglect."

He said the National government had approved over $4 billion of capital expenditure to bring the grid "up to speed" but that it would take time to see the work completed.