Line charges rise attacked

By RICHARD BRADDELL utilities writer

The Major Electricity Users' Group, an association of large electricity users, has criticised an 8 per cent rise in the amount electricity networks charged their customers in the year ended March 2000.

Electricity users paid $1.4 billion in line charges in the March 2000 year, or 8 per cent more than in 1999, according to data released by the Economic Development Ministry.

"Consumers paid an additional $103 million to the line monopolies," Major Users' chief executive Ralph Matthes said.

"MEUG and others have consistently argued that the line monopolies are out of control because they can unilaterally increase prices."

Most lines companies agreed to a voluntary price freeze during that period, but even as total consumption rose only 5.8 per cent, industrial users paid 7.8 per cent more and residential 8.1 per cent more.

But the official figures may tell more about the unsatisfactory state of the ministry's data as much as anything.

Although the number of residential users rose a surprising 6.9 per cent, the ministry said part of that growth might be due to double counting resulting from high customer movement.

Electricity Networks Association chief executive Alan Jenkins said Mr Matthes might be "shooting from the hip" in drawing conclusions from the numbers released this week.

"I've written to the MED asking them how they reconcile the numbers because we know damned well there's been no increase in distribution charges," he said.

Even if consumption had gone up, that did not explain the rise in lines payments since lines companies usually charged retail distributors for the total line service and that did not change with volumes, he said.

Mr Jenkins said the surprising increase might owe more to haphazard separation of lines and energy data streams when the power companies were broken up into lines and energy businesses in 1999.

The findings also fly in the face of statistics compiled by another section of the ministry, which show a decline in weighted average line charges over the 2000 year.

One difficulty with the latter data is that they do not show how the weightings are determined, making it impossible to reconcile them with other statistics, Mr Jenkins said.

"It's a real source of annoyance because if you are trying to do information disclosure or make some meaning out of the light handed regime, you need some numbers that add up, and there's all sorts of anomalies that have plagued us forever."