Orion seeks permission for price hike

Orion's electricity network was damaged in the devastating Canterbury 2010 and 2011 earthquakes. Photo / Richard Robinson

Christchurch power company Orion has asked the Commerce Commission for permission to hike prices by 5 per cent to recover earthquake rebuild costs.

The firm wants to revamp its electricity network which was damaged in the devastating Canterbury 2010 and 2011 earthquakes and put in high voltage underground cables, overheard lines and pylons, and new substations.

But they want consumers to pay for it, with the upgrade estimated to cost households an extra $1000 over the next 10 years - or on average $8.70 a month, from April next year.

"As a result of our final calculations, the figure of $8.70 is slightly higher than the $8.50 communicated in our draft proposal last year," Orion chief executive Rob Jamieson said.

The proposed changes do not include annual inflation adjustments, which would be additional.

The commission now has 40 days to evaluate Orion's proposal.

If accepted, the commission will thoroughly analyse the application and undertake formal public consultation before making a final decision later this year.

Thirty eight submissions were received after Orion's request for feedback.

"We're very grateful for the feedback and have reviewed it thoroughly. It's clear that people want us to restore a good quality electricity system," Mr Jamieson said.

"We found there was good support for our proposal to restore the network, spread the cost of doing so over time and recover costs from power consumers.

"Some submitters suggested that the costs should be met by a range of parties, such as our council shareholders and the Government."

Only a small number suggested that prices shouldn't go up at all, Orion claims, but stressed they have to consider the "long term interests of our region".

"We think it's fair to recover our reasonable costs from the consumers who use, and benefit from, our service," Mr Jamieson said.

"The proposed prices provide no more than a fair return and provide the right incentives for us to continue to make sound investments in a strong, essential electricity network for the good of our community."