A proposal that allows national grid operator Transpower to recoup the cost of upgrades will push electricity charges up if given the greenlight — an outcome Whangārei mother Karen Kerr is ill-prepared for.

The Electricity Authority is currently consulting the public on Transmission Pricing Methodology (TPM) that will require consumers to pay for transmission costs they directly benefit from, and not for those they do not.

Under the current model, the authority said the cost of regional transmission investments are spread across all consumers regardless of where they lived or the benefits they got.

The indicative average price of transmission across residential, commercial and industrial consumers in Northland would be $1.9 megawatt per hour, up from $12.3MWh to $14.4MWh

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In the Far North district, the price would increase from $10MWh to $13.2MWh.

The average increase for households throughout Northland would be $21 in the first year. However, these are only indicative prices and if the proposed guidelines are adopted, Transpower will have to develop its TPM before prices can be set.

If the TPM gets adopted, it will be up to Northpower and Top Energy to determine how the transmission charges get allocated to their customers.

Power charges will rise across Northland if a proposal on how costs for grid upgrades should be recouped goes ahead.Photo / File
Power charges will rise across Northland if a proposal on how costs for grid upgrades should be recouped goes ahead.Photo / File

Kerr moved up from Timaru in January and after living in a tent on a friend's lawn for two months with her husband and two children, found a three-bedroom house in Kamo.

Her first power bill was $337 and because she struggled to pay it, the family fell behind when the second bill of $231 arrived.

She consulted Whangarei Budgeting Services after receiving a letter advising of power disconnection but eventually managed to work out a payment plan.

She suspects a heatpump contributed to a huge chunk of her power bill as her family didn't have any other forms of heating.

In Timaru, her power bill in winter was usually between $150 and $200 and said the huge power bills in Whangārei forced her to ask for and get food parcels from the Salvation Army twice.

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Any increase in power charges, she said, would be a huge blow.

"It will get to a point where we'll just end up not having power because then I'll have to choose between feeding the family or keeping them warm," she said.

"It shouldn't be about making a choice. Food and power are two essentials and they shouldn't be this expensive."

To exacerbate the situation, Kerr said her family didn't qualify for Winter Energy Payment from Work and Income as both she and her husband worked full-time.

She works 65 hours a week as a caregiver and her husband works at a company that makes windows and doors.

TPM sets out how Transpower will recover its maximum allowable revenue from transmission costs, expected to be on average $853m per year between 2020 and 2025, rising to more than $1b each year by 2030.

The authority's proposal provides for a 3.5 per cent cap on increases in the total electricity bill to give households and businesses certainty on the level of charges in advance and allow industrial customers time to adjust to the new charges.