Household power bills surge

By Michael Dickison, Andrew Koubaridis

Lines companies, retailers blame each other as price rises add hundreds of dollars to household costs.

Lines companies, retailers blame each other as price rises add hundreds of dollars to household costs. Photo / NZPA
Lines companies, retailers blame each other as price rises add hundreds of dollars to household costs. Photo / NZPA

Household power bills have risen by up to $316 this year, and lines companies and retailers are blaming each other for the increases.

Figures from the Ministry of Business, Innovation and Employment show New Zealand's two million power consumers faced an average 5.4 per cent increase in their bills in the year to last month.

Increases in the two previous years were 6.2 per cent and 4.3 per cent.

The chief executive of electricity retailer Powershop, Ari Sargent, said increases had been largely caused by higher lines charges, which make up about 40 per cent of household power bills.

Lines charges for central and South Auckland households went up $74 over the past 12 months, he said.

But the ministry's figures suggest average bills on Vector lines increased by almost twice that amount, or $137.

It was the fifth-highest increase of 11 Auckland retailers surveyed.

"Unfortunately, these increases are unavoidable for most people," Mr Sargent said. "But households do have a choice when it comes to controlling their power use."

Auckland's annual power-bill rises ranged from zero with Nova Energy to $236 with Energy Online.

Richard Gordon, an Energy Online spokesman, said the lines charges had been a factor in increases for some of its Auckland customers.

But a Vector spokeswoman said the lines company was heavily regulated and could increase its prices only by inflation plus costs, which this year had been driven by Transpower's network upgrades.

"What you would have to work out is whether the retailers have only increased by our charges and not added anything else on top of it," she said.

A ministry spokeswoman said transmission infrastructure costs contributed to this year's rises.

"But you can't ignore the fact that with the rising population there's always increasing demand for electricity. There's always a continued upward pressure."

Nationally, the biggest average increase for the year was Genesis Energy's $316 for its Northland consumers using Top Energy lines.

At the other end of the scale, bills for Trustpower customers on Network Waitaki lines in Otago fell by $201.

An international survey this month found New Zealand had the second-highest rate of consumers switching power companies - saving almost $9 million collectively.

VaasaETT, an energy think-tank in Finland, found that almost a fifth - 19.5 per cent - of New Zealand consumers switched power companies last year, up from 10.5 per cent in 2008.

Electricity Authority chief executive Carl Hansen said the findings underscored its What's My Number campaign, which encourages switching to put competitive pressure on retailers.

Mangere Budgeting Services chief executive Darryl Evans said the number of people having trouble paying electricity bills was increasing.

"An awful lot of families are telling me they're not using any heaters, and as a consequence kids are getting sick."

Mr Evans said that ultimately, the money would come from families' food budgets, and he believed that was a reason children were going to school hungry.

* A correction has been made to this story to reflect the fact that Powershop is an electricity retailer, not a price comparison service.

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production apcf04 at 22 Dec 2014 15:59:33 Processing Time: 393ms