Mercury Energy is raising its prices across the country by an average of 5.8 per cent, blaming the bulk of the increase on the sharp lift in charges from the national grid company, Transpower, as it invests billions of dollars upgrading its aging infrastructure.
The increases will apply from April 1 and coincide with 5 per cent average increases for Genesis Energy customers in Wellington, and the west and north of Auckland. Mercury says it won't review standard residential electricity tariffs again before April 2013.
Mercury is the retail arm of Mighty River Power, the first of the state-owned energy companies in the queue for partial privatisation, with the government aiming for a float later this year.
Mercury says the tariff increase includes an average rise of 3.7 per cent in the charges passed through from the local lines companies, partially reflecting significant increases in charges by Transpower. Grid and local network charges account for about 40 per cent of a customer's bill, and are regulated by the Commerce Commission as monopoly services.
Mercury's charges for energy, cost to serve customers, and to maintain profit margins represent an average increase of 2.1 per cent on a customer's total bill, Mercury says.
With respect to customers in Christchurch, Mercury Energy won't review prices again until next April, "unless an additional lines price increase is implemented to support the major investment required to repair lines infrastructure in Christchurch."