Alpine to raise line charges

Andrew Tombs
Andrew Tombs

South Canterbury power consumers could face an $84-a-year rise in their bills if power companies decide not to absorb the lines charges.

Lines company Alpine Energy is to increase its charges by an average of 14 per cent for the average household (11,400 kilowatt hours per year), or roughly $8.60 per month.

The changes will come into effect on April 1.

Lines and transmission charges make up about 30 per cent of customers' power bills, but Alpine chairman Steve Thompson said it was "up to the retailers" if power prices would rise accordingly.

"According to the Commerce Commission, Alpine Energy has been under-charging on its assets for several years. We would hope the retailers would consider that before setting next year's bills," he said.

Genesis, Trustpower, Meridian and Contact have not released their prices for next year, as they were still assessing the ramifications of Alpine's announcement.

Alpine chief executive Andrew Tombs said it would spend about $12 million on capital projects over the next year - in the last five years, the company has spent more than $100m renewing and extending its assets.

"Much of our network is over 50 years old, so there has been a lot of work to bring it up to date with current demands," he said.

"South Canterbury's economy is growing and we need to ensure the network can cope with this."

Mr Tombs said the Commerce Commission determined Alpine's regulated rate of return on its assets should be about 5.8 per cent a year, but in recent years, it had been about 2.1 per cent.

National grid operator Transpower had also signalled a 17 per cent increase in its charges for next year. "Alpine has to wear some of those charges too, so to an extent our hands are tied," Mr Tombs said.

Last year, the company spent more than $2m on repairing its network, after wind, snow and rain cut power to thousands of homes and downed hundreds of powerlines.

Mr Tombs said the company's repair costs would be covered by its maintenance budget.

Alpine's shareholders are the Timaru (47.5 per cent), Waimate (7.5 per cent) and Mackenzie (5 per cent) district councils, as well as the South Canterbury Lines Trust (40 per cent).

The Timaru Herald