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Residential electricity customers will be getting refunds of "a few dollars" as a result of negotiations between the Commerce Commission and national grid owner Transpower.
State owned enterprise Transpower originally proposed a 19 per cent price rise for 2006/07, starting on April 1 this year, and forecast an
average 13 per cent rise in each of the next four years.
But the commission considered those rises were not justified and last December announced its intention to declare control of Transpower's transmission services.
In March, Transpower announced it was seeking an administrative settlement with the commission as an alternative to regulatory control being imposed.
At that time, Transpower agreed to provide its customers with a credit equivalent of the planned price increases. That credit was continued for the year through to March 31, 2007.
Electricity lines business, or is some case retailers, have been holding the credit, and in April next year the credit will be passed back to electricity users.
Yesterday Transpower, which must advise customers of prices at least three months ahead, said it proposed to raise prices on April 1, 2007 by 15.2 per cent over the March 2006 level.
That increase comprises a 12.2 per cent increase backdated to April 1, this year, compounded with a 2.7 per cent increase from April 1, 2007.
The commission yesterday said that decision meant that Transpower customers would face a 12.2 per cent increase for 2006/07, rather than the 19 per cent rise earlier proposed.
Commission chairwoman Paula Rebstock said that while the commission and Transpower were still in talks about a possible settlement, the commission's preliminary view was that the new prices were appropriate for the two years.
Consumers' Institute spokesman David Russell said electricity users would be due for some form of refund.
"It won't be great for the domestic consumer, it will just be a few dollars, but that's all got to be sorted out, and that will happen after April of next year," he told National Radio.
"More importantly, we can look forward to not paying anywhere near as much as we would have otherwise."
Mr Russell expected the refund would be taken off users' bills because of the small amount for each of about 1.5 million customers throughout this country.
Transpower's charges covered only the transmission part of power costs -- about 10 to 12 per cent of domestic consumers' bills, he said.
He was confident the need to upgrade the electricity transmission grid would have been taken into account in the lower price rise.
The issue was how much upgrading was needed, including how much new work may be done as a "security blanket", Mr Russell said.
"I don't think the Commerce Commission would be so short sighted as to put the squeeze on Transpower to the point where the supply of electricity is going to be compromised."
- NZPA
