By CATHY ARONSON
HAMILTON - Soaring electricity line charges have prompted Waikato's regional council to buy its own diesel-powered generators for its flood control pumps.
Environment Waikato says its lines supplier, United Networks, has increased its charges by almost 50 per cent in the past four years for the 52 pumps in the Waihou Valley and Piako River Scheme.
The charges are expected to more than double to $740,000 next year under a new pricing system.
The regional council claims the pricing is unreasonable, and says it cannot absorb the charges.
Asset manager Scott Fowlds said the council was proposing to replace United Networks' electricity supply with diesel generators for five of its 10 largest pumps, which accounted for 80 per cent of the power bill.
The five generator-powered pumps and five other large pumps will also be controlled by time clock to restrict their operation during peak-charge times.
The pumps drain and pump out water from areas behind stop banks when rivers overflow.
Mr Fowlds said the pumps were used no more than 10 days a year, and the regional council could not justify paying a large increase in line charges.
"The only other way to manage it is to pass the costs on to residents," he said.
"But that is absolutely not an option, so there is no other alternative except providing the power ourselves."
The council was waiting on the ministerial response to the recent electricity inquiry report before approving the $1.3 million project.
But while this might establish price controls and charging thresholds, it would be unlikely to change the council's position.
Unless transmission costs were reduced substantially, the council would go ahead with the project.
Mr Fowlds said power supply charges had fallen only slightly, and this did not compensate for the increased line charges.
To save money, two generators would be installed this year and the other three next year.
Mr Fowlds said the council approved installation of the time controls to save money in the future.
He said the annual cost of running diesel generators and control systems would be almost half the cost of United Networks' proposed price rise.
UNL spokesman Ralph Little said the company had placed a three-year cap on its line charges from 1999.
The lines company was committed to the electricity inquiry recommendations of fair electricity prices and reliable supply, he said.
The company was also waiting on the ministerial response to the electricity inquiry.
Mr Fowlds said UNL had capped its charges only for the past year while the two parties negotiated a pricing structure.
He said its line charges for the 52 pumps went from about $56,000 in 1996 to $280,000 last year, and would double again next year.
He understood part of the increase was costs passed on from rises in Transpower's national grid charges.
Mr Fowlds said that while other regional councils would probably face similar increases, Environment Waikato had been the first to combat them.
"When there is no control and competition in the lines market, you don't have many options other than to think outside the box and come up with your own solutions."
He said other regional councils were watching Environment Waikato's moves and waiting for the ministerial response to the inquiry before acting.
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