Larger power bills mooted under plans

The cost of electricity could rise for Northlanders if the Electricity Authority's proposed area-of-benefit charge goes ahead.

Northlanders could face larger power bills if the Electricity Authority's proposed "area-of-benefit" charge goes ahead.

The authority's proposal seeks to alter the way transmission charges are shared among transmission customers so that charges are linked to the transmission services delivered and the costs involved.

Northland Chambers of Commerce chief executive Tony Collins said the electricity network and power transmission should be delivered fairly across the entire country and regions should not be penalised.

"This have will a cost to the region's residents and small businesses," Mr Collins said. However, he added large power users such as the New Zealand Refining Company may be able to make a case for special consideration.

"If it's going to increase costs to business then that's another barrier for growth in the region."

Mr Collins said it was difficult to quantify the real cost until any additional charges had bedded in.

"Hopefully this will get businesses looking carefully at making savings where they can."

Mr Collins said there appears to be a contradiction in the authority's assertion that charging regions such as Northland more would generate cheaper power.

Northpower spokesman Steve Macmillan said the company was in discussion with the authority.

"We're working through the process with the authority aiming to achieve something positive for our consumers."

The authority estimates residential customers in the Whangarei region could be charged up to an additional $64 a year while Far North residents could be charged up to an additional $87 per annum. The degree of cost depends on the avoided cost of transmission payment (ACOT) which is made to generators which supply homes and businesses through local lines which are not directly connected to Transpower's network.

Top Energy's chief executive Russell Shaw said his company's consumers faced an increase in charges by the authority from $4.3 million to $9.5 million.

However, that is likely under the proposed changes to be reduced to about zero once Top Energy's upgraded Ngawha power station goes into full production, the first stage occurring in about four to five years.

The authority says consumers in Auckland and Northland would face the biggest increase in costs under the proposals because they have received the most benefit from recent upgrades to the electricity grid.

The authority's consultation closes on Tuesday, July 26, and a final decision on the proposals is due in October, with the aim to have the new regime in place by 2019.