'A lot of people are struggling'

Electricity prices have skyrocketed

LAUREN HAYES
Last updated 05:00 23/07/2013
David Parker
JOHN HAWKINS/Fairfax NZ
POWERFUL TALK: Labour party MP and finance spokesman David Parker visited Invercargill yesterday to talk about high power prices.

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Electricity prices have increased 20 per cent in the south since 2008, meaning many households are now paying $500 more for a year's electricity than five years ago.

Aid workers said the extra financial burden was putting a huge strain on many families already struggling to pay their bills.

Some families were being forced to choose between buying food or paying their electricity bills, they said.

Energy prices released quarterly by the Ministry of Business, Innovation and Employment show the retail rates paid by Southland low-use customers increased by an average of 20 per cent between May 2008 and May 2013, with some electricity companies' rates increasing by almost a quarter during that period.

The figures do not relate to Invercargill, with its rates increasing 15.3 per cent on average.

New Zealand households use 8000 kilowatt-hours per year on average, meaning many Southland households will now be paying $500 more for a year's electricity than in 2008, the figures show.

Salvation Army foodbank co-ordinator Brenda King said many Southlanders were not coping with the extra costs and had to choose between eating or electricity.

She had provided a food parcel to a client yesterday who was wrestling with large power bills and could not afford food, she said.

"It's the food money - that's the first thing they have to use.

"It's easier to find a food parcel than to find the cash to pay the power company." While winter was traditionally a busy time for the food bank, demand for the service had not let up all year, she said.

Age Concern Southland president Peter Kett said he was also seeing Southlanders in trouble as electricity prices increased.

"It's an essential.

"They need the electricity to heat their homes.

"Power bills go up, the phone bills go up and people just have to keep paying. A lot of people are struggling."

He knew of people, not just pensioners but also young families, who were on metered electricity and spent winter in bed or wrapped up in rugs because they could not afford to top up the meter, he said.

Increases to electricity prices would be more palatable if pension rates had increased at the same rate, he said.

Labour Party finance spokesman David Parker, speaking about rising electricity costs in Invercargill yesterday, said in the past year prices had increased six per cent on average, hitting southern households hard.

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"It's not just pensioners who are struggling to pay their power bills.

"The majority of people find their power bill's a vast amount to swallow every month."

However, Trustpower community relations manager Graeme Purches said Mr Parker was "playing raw politics" and believed prices had increased more in the five years from 2003, when Labour was in government, than they did between 2008 and 2013.

Figures on the MBIE website show average residential electricity prices, including GST, increased nationwide from 16.42c per kWh in 2003 to 23.28c per kWh in 2008, an increase of 29.5 per cent.

While consumers did pay more for electricity now than in 2008, Mr Purches believed the increase was largely down to increased line charges.

Contact Energy did not respond by deadline yesterday.

- © Fairfax NZ News

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