Power companies are warning of looming price rises, despite figures showing electricity costs have nearly doubled in the last 11 years.

Ministry of Economic Development (MED) statistics show average power prices rose from 13.9 cents per kilowatt-hour on average in May 2001 to 26 cents in May 2011.

Meanwhile, Contact Energy has called current power prices "unsustainable" and indicated price increases are on the way across the electricity sector.

The Domestic Electricity Users Network this morning hit out at the 87 per cent bump in average power prices over 2001 levels.


Its spokeswoman Molly Melhuish called the price rises "wrong" and labeled them an unfair burden on domestic consumers.

She called for increased regulation to constrain electricity costs.

"No other country in the world has power prices solely governed by neo-classical economic regulation.

"We need to repeal the Electricity Act and put forward a more sustainable bill."

Ms Melhuish said price rises faced by everyday customers were about 50 per cent higher than those of corporate consumers.

Consumer NZ chief executive Sue Chetwin said power prices had escalated unfairly since 2000 and indicated domestic users would be hit with further rises next year.

She called on customers to investigate her organisation's 'Powerswitch' scheme, which has seen about 8000 users leave Contact Energy for other providers.

"In the past it has been easy for retailers to just turn to consumers and put their prices up. Consumers are no longer going to be such easy targets. They're going to have to look at putting up prices for larger users."


Contact Energy spokeswoman Janet Carson confirmed the current electricity prices were "unsustainable" and said further rises were expected.

"Contact believes that prices will need to rise over time so new generation can be built to continue to allow NZ to grow and enjoy the security of electricity supply it does today.

"The timing and quantum of these prices rises are influenced by many factors."

Electricity Authority chief executive Carl Hansen this morning told Radio New Zealand the electricity market was working well and warned that introducing more competition would not slow down power cost increases.

The cost of generating electricity was going up as companies turned to more difficult sites and the more expensive sources of fuel, he said.

"I think it's very easy for some analysts on the sideline to take potshots at the current arrangements but the reality is it's a market that's been working very effectively over quite a long period of time."

Competition would only constrain price increases so they reflected the cost of new supply, Mr Hansen said.