No power to force electricity savings

RICHARD MEADOWS
Last updated 13:38 26/07/2013

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The Commerce Commission says it has no power to force electricity retailers to pass on the savings from falling lines charges.

Last year the watchdog ordered infrastructure company Vector to cut distribution prices by 9 per cent, the equivalent of a $60 annual saving per year for an average household.

But energy trusts, which have an ownership stake in most line companies, say few retailers have passed the savings on to consumers.

The rules came into force in April, but as of May only two out of 11 Auckland retailers - Just Energy and Meridian - had dropped their prices.

A commission spokesman said it did not regulate retail electricity prices.

"Unlike the electricity lines services provided by Vector, there is competition between providers of retail electricity services," he said.

"Retail electricity providers have no obligation to pass through changes [increases or decreases] in input prices, such as the price for electricity lines services."

The Auckland Energy Consumer Trust, which owns most of Vector, said it was a shame that consumers weren't benefiting more from the drop in lines charges.

Chairman William Cairns said many New Zealand households were under financial pressure.

"It's extremely disappointing that unregulated retailers - for the most part - are taking gains meant for consumers."

A real concern was that a recent survey showed about a third of New Zealanders could not afford to heat their homes adequately in winter, Cairns said.

"A little respite on power bills, we feel, would be welcomed by consumers."

Energy Trusts of New Zealand, the umbrella organisation for 21 energy trusts, has also lent its support to its Auckland member's cause.

Chairwoman Karen Sherry said all the energy trusts should take note of what was happening.

"We support the stand that the Auckland Energy Consumer Trust is taking, and call for a better deal for Auckland's electricity consumers."

Labour's finance spokesman David Parker jumped on the news as "further proof that New Zealand's electricity market is broken".

Labour's NZ Power policy would cut power bills by hundreds of dollars a year and restrict future price increases, he said.

Power prices have risen 3.4 per cent in the year to June, well above the record low overall inflation rate of 0.7 per cent.

Consumers can shop around to get the best prices through the Electricity Authority's What's My Number? website.

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- BusinessDay.co.nz

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