Electric bill to rise 8.4 per cent
Electricity infrastructure costs will rise for Cantabrians for the first time since the February 2011 earthquake.
The Commerce Commission said this morning Orion may raise its charges by 8.4 above the rate of inflation in April next year and by 1 per cent above inflation for the next four years.
The price rise will mean an extra $4.80 a month for the typical Christchurch household electricity bill, and not the $8.50 a month that Orion sought.
Orion wanted 15 per cent above inflation from next year and 1.2 per cent above inflation for the next four years.
Orion's charges make up about a quarter of the electricity bill.
Orion and the 27 other lines companies in New Zealand are regulated by the commission.
Orion did not appear pleased with the decision. It said it would now analyse the 245-page commission decision.
It said since the February 2011 earthquake, Orion's prices had been frozen in real terms despite its costs rising in the rebuild and its revenue being severely reduced.
The company said its price increases had been below inflation since 2001.
Orion CEO Rob Jamieson said the company was mindful of the impact the price increase would have on consumers, especially those on low incomes.
"However, it is critical we ensure our network is resilient enough to protect our community from future disasters that may strike," he said.
"Despite this increase, Orion and its shareholders will incur a substantial financial impact from the Canterbury earthquakes."
Jamieson said the company aimed to restore the network to pre-quake levels of resilience and reliability, and support the city's rebuild.
"Our driver is, and always has been, to manage our network in the best long term interests of consumers and our community. That is a responsibility we take very seriously. There's a lot for us to consider in the Commission's decision. Our next step is to work through the detail."
The commission's decision meant Orion's pricing would still be below the New Zealand average, he said.