Bills soar but relief due next year

By Michael Dickison

Some residential customers can look forward to a cut of about $57 in annual bill.

The Commerce Commission has ordered Vector to cut back its line charges by 10 per cent in April. Photo / Getty Images
The Commerce Commission has ordered Vector to cut back its line charges by 10 per cent in April. Photo / Getty Images

Power bills have jumped more than $100 this year, latest figures show - but Auckland households can expect some reprieve next year.

Figures from the Ministry of Business, Innovation and Employment have found average price rises across the country of $67 due to transmission and lines costs and a further $50 added on by retailers.

The Commerce Commission, which regulates the monopoly-based electricity lines network, has investigated lines companies to find out if prices were in line with their costs.

It has ordered Vector, which connects Auckland City, to cut back its line charges by 10 per cent in April.

Powershop chief executive Ari Sargent said electricity retailers, such as his, should be passing on the price drop to households next year.

Residential customers could save about $57 a year, he said.

In the past year, electricity retailers in Auckland have raised typical power bills by amounts ranging from nothing (Nova Energy) to $236 (Energy Online).* About $70 of the increase was due to higher transmission charges brought on by Transpower's network upgrades.

"The average Kiwi household paid $117 more for their power in the year to November. For some Aucklanders, the increase was more than double that amount," Mr Sargent said.

Vector chief executive Simon Mackenzie said the company's price increases had been restricted to the rate of inflation for several years by the Commerce Commission. The 10 per cent downward adjustment, slated for April, was a routine five-yearly reset, which the commission had determined was necessary due to Vector having found ways to reduce its costs.

A parallel appeal process, in which the company is arguing against the "counterintuitive" adjustment penalising efficiency gains, could alter the planned 10 per cent decrease.

Commerce Commission deputy chairwoman Sue Begg said the price caps had been adjusted to better align distributors' revenues with their costs.

"We aim to create an appropriate balance between providing incentives for these businesses to invest in their networks, while ensuring that consumers are being charged based on the cost of services provided in each region."

* CORRECTION: Bosco power bills have increased $109 on average this year, not $245 as stated in this article on Tuesday, making it the second best-performing of 11 retailers, not the worst. The incorrect figure was supplied by the Ministry of Business, Innovation and Employment.

- NZ Herald

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