NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • Deloitte Fast 50
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In

Advertisement
Advertise with NZME.
Home / Business / Economy

Reward for turning off in power crises

Brian Fallow
By Brian Fallow
Columnist·NZ Herald·
3 Mar, 2011 04:30 PM3 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save
    Share this article
Aucklanders were asked to cut their power use in 2003. Photo / Richard Robinson
Aucklanders were asked to cut their power use in 2003. Photo / Richard Robinson

Aucklanders were asked to cut their power use in 2003. Photo / Richard Robinson

Consumers' efforts to reduce electricity use during power crises will be financially rewarded under a scheme unveiled by the Electricity Authority yesterday.

During a public conservation campaign like those in 2001, 2003 and 2008, residential and small business consumers will be paid $10.50 a week in compensation.

Individual consumers will get the payment whether they reduce their consumption or not.

But the previous system created a bigger free-rider problem, the authority argues.

Electricity retailers exposed to high spot prices in dry years have had an incentive to call for public conservation campaigns even when the risk of an actual physical blackout was still quite low - as low as a probability of 1 per cent - the authority's chief executive, Carl Hansen, said.

By removing the free option of relying on public-spirited consumers to voluntarily cut back their demand, the scheme would encourage power companies to make more use of commercial arrangements to manage dry-year risk and to invest in peaking plant.

The arrangements could include contracting with their larger customers to buy back demand using hedges to manage risk.

The result should be fewer public conservation campaigns, which have undermined confidence in the robustness of the electricity system, and investment that relies on it, to an extent that is not justified, Hansen said.

A conservation campaign will only be triggered when there is a 10 per cent probability of physical shortages.

Electricity retailers will be free to offer their customers alternatives to the $10.50 a week scheme but they will have to offer that default option.

Powershop executive Ari Sargent is critical of the scheme, saying it has not been justified by any transparent cost/benefit analysis, will push up electricity prices, and will have the anti-competitive effect of deterring new retailers from entering the market.

"A smaller retailer such as Powershop, with a customer base of 25,000 and no generation business, would have to shell out $2 million over an eight-week conservation campaign. As a low-margin business this would significantly and negatively impact us, and would almost certainly deter new entrant retailers," he said.

Powershop is wholly owned by Meridian Energy, but Sargent said it operated independently and offered a new entrant's perspective on the issue.

The authority argues that in a dry year the scheme would increase the incentive for retailers to pay the wholesale prices required by thermal generators earlier than they might otherwise, thereby reducing the risk of shortage.

But Sargent said the flipside of that would be higher wholesale and ultimately retail prices.

POWER BILLS TO RISE FOR VECTOR'S BUSINESS PARTNERS

Vector's business customers face a rise in lines and transmission charges of between 3 and 4 per cent.

The charges will mainly hit small and medium-size businesses from April 1. Auckland householders have been spared increases this year.

Across its entire network, the average increase in Vector charges is 2.6 per cent comprising an inflation-linked 1.2 per cent from the lines company and 1.4 per cent of "pass-through" costs from Transpower, and local and central government levies.

Energy costs make up about 60 per cent of a bill, lines companies such as Vector make up about 30 per cent and pass-through costs the remaining 10 per cent.

This year Transpower transmission costs have increased by 5.5 per cent, which reflecting the big spending on the national grid through Auckland.

Vector chief executive Simon Mackenzie said the increases were linked to the rate of inflation permitted by the Commerce Commission under the thresholds regime.

- Grant Bradley

Discover more

New Zealand

Far North residents face day without power

18 Apr 01:49 AM
New Zealand

Towel rail timers could save $70m

18 Apr 05:30 PM
Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.
Save
    Share this article

Latest from Economy

Premium
Property

Contrasting sites: New supermarket opens next to abandoned car lot

Premium
Property

Housing market down, council rates up in latest ANZ property focus report findings

Premium
Economy

'Sorry Adrian lost his cool' - The Reserve Bank email officials wouldn't release


Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

Advertisement
Advertise with NZME.

Recommended for you

Surge in house fire deaths blamed on alternative heating methods
New Zealand

Surge in house fire deaths blamed on alternative heating methods

No room for Ruby Tui as Black Ferns name World Cup squad
Black Ferns

No room for Ruby Tui as Black Ferns name World Cup squad

NZ shivers in coldest temps of year, braces for severe weather shift
New Zealand

NZ shivers in coldest temps of year, braces for severe weather shift

Christchurch paramedic's warning after bladder cancer diagnosis
New Zealand

Christchurch paramedic's warning after bladder cancer diagnosis

Thailand says over 100,000 civilians flee clashes with Cambodia
World

Thailand says over 100,000 civilians flee clashes with Cambodia

‘Isolated and sad’: Boy thrown at drawers by his caregivers
New Zealand

‘Isolated and sad’: Boy thrown at drawers by his caregivers



Latest from Economy

Premium
Premium
Contrasting sites: New supermarket opens next to abandoned car lot
Property

Contrasting sites: New supermarket opens next to abandoned car lot

Scheme for three-level apartments on hold, awaiting further information about the project.

25 Jul 01:00 AM
Premium
Premium
Housing market down, council rates up in latest ANZ property focus report findings
Property

Housing market down, council rates up in latest ANZ property focus report findings

24 Jul 03:00 AM
Premium
Premium
'Sorry Adrian lost his cool' - The Reserve Bank email officials wouldn't release
Economy

'Sorry Adrian lost his cool' - The Reserve Bank email officials wouldn't release

23 Jul 10:43 PM


Solar bat monitors uncover secrets of Auckland’s night sky
Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

06 Jul 09:47 PM

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP
search by queryly Advanced Search