Power bills higher Marlborough

CATHIE BELL
Last updated 06:48 03/04/2014

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Marlborough power users experienced the biggest increase in their power bills in the country last year, according to data analysis by online retailer Powershop.

Powershop chief executive Ari Sargent said its analysis of Ministry of Business, Innovation and Employment figures showed the Marlborough-Nelson region had the highest increase last year in power prices.

The ministry's latest quarterly survey of domestic electricity prices shows power bills for the average household increased by an average of $63.49 nationwide in the year to February 2014.

Bills for the average Marlborough-Nelson household rose by $133.04 in the same period, while Dunedin had the smallest increase at $9.12.

Sargent said it was "quite common" for there to be less competition and higher prices in provincial areas because it was harder for new entrants to get in there.

It was not immediately obvious what was driving increases in Marlborough, he said, with three big retailers increasing their charges by about $100 a year and a fourth increasing its charges by more than $300.

"There is no real pattern to what's going on in that area.

"It's not one we trade in, so we don't keep a close eye on it."

Sargent said consistency across retailers within a region might be expected but there was not necessarily consistency across all areas.

Power companies charged different rates to consumers in different parts of the country.

Some of that was because different lines companies had different charges but electricity wholesaling had different costs, and different risks in different areas too.

Some of the differences related to the level of competition and "strategic drivers" to change market share within regions, Sargent said. That limited Powershop's reach, with it operating mainly in urban areas. It was difficult to get economies of scale in smaller areas such as Marlborough, Sargent said.

He said Marlborough people should shop around, as they could save themselves more than $300 a year. There was about $360 a year between Contact, the cheapest electricity retailer in the Marlborough Lines area, and Trustpower, the most expensive retailer in the area. Trustpower still had 44 per cent of market share in Marlborough, Sargent said.

Domestic Energy Users' Network convener Molly Melhuish has been reported as saying prices had always been higher in the regions. "Competition has brought prices down significantly in the regions but they are still higher than where competition is strong."

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- The Marlborough Express

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