Power retailers to pass on lines charge increase

MATTHEW LITTLEWOOD
Last updated 05:00 23/01/2014

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South Canterbury consumers could be in for a mild shock, with most power companies deciding to pass on the increase in lines charges.

From April 1, lines company Alpine Energy will increase its charges by an average of 14 per cent for the average household (11,400 kilowatt hours per year), or about $8.60 per month.

Typically, lines and transmission costs make up about 30 per cent of a customer's bill.

Although none of the retailers would confirm prices for the coming year, most said the increase in lines charges would be passed on to the customer.

Genesis spokesman Richard Gordon said customers would have to wear it.

"We're not going to absorb the changes ... and we never have in the past. It's a separate line-item charge that is factored into every customer's bill," he said.

Mr Gordon acknowledged this could lead to an overall increase to customers' power bills of about 4 per cent.

"Lines companies have their own charges, which we have to wear, and pass on to the customer," he said.

Alpine chief executive Andrew Tombs told the Herald the Commerce Commission determined that 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.

Contact Energy spokesman Shaun Jones said it would not be increasing its own electricity or gas prices this year, but it would have to "account for changes to network, transmission and metering charges".

He agreed this meant people's power bills could increase by at least 4 per cent this year.

Meridian Energy spokesman Paul Clearwater said the company was "aware of the implications" of Alpine's announcement, but had to calculate the costs.

Mighty River Power is freezing its electricity and gas prices till April 2015, but total power bills could still rise because of higher charges by lines companies and for the national grid.

Trustpower could not provide information.

Alpine chairman Steve Thompson said it was up to the retailers to decide whether they would pass on the costs.

However, he noted the Commerce Commission calculated that Alpine had been undercharging on its assets for several years, and felt retailers should acknowledge this.

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- South Canterbury

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