Controversial power review may not affect charges in Northland

A review of the way electricity is transmitted is not expected to result in a substantial rise in power charges in Northland. Photo / File

Changes to the way people pay for transmission of their electricity should not impose a shock on Northlanders' power bills, the Electricity Authority says.

The government agency's controversial Transmission Pricing Methodology review is back on track to ensure consumers paid only for network upgrades they directly benefited from.

Last year, the EA put the review on hold after the 11th-hour discovery of a raft of errors in the cost-benefit analysis on which the plan was based. Errors included locating power stations on the wrong island and overstating the Far North's power consumption by a factor of 10.

The stated aim of the review was to ensure consumers paid only for network upgrades they directly benefited from. If it had gone ahead power prices would have increased sharply in Auckland and Northland and dropped in Southland, which is close to the country's biggest power stations.

This week, the EA signalled it would continue to look into benefit-based charging as part of a new proposal for transmission pricing. It needs to prepare a cost-benefit analysis and modelling of potential impacts as part of finalising a formal proposal for consultation.

EA chief executive Carl Hansen said the impact, if any, on Northland power users from the proposal was not known at this stage.

Top Energy's expansion of the Ngawha geothermal generation, he said, were factors that would affect future transmission charges.

Far North residents are paying some of the highest electricity charges in New Zealand.

"We think any change to how these charges are allocated in future can be done without
imposing a shock on consumers' power bills compared with what they pay now," he said.

Hansen said if the overall cost of transmission rose in a region, the impact would be only a small percentage of a consumer's bill. He is urging Northlanders to shop around for better electricity deals and save hundreds of dollars each year.

Last year, he said Northland consumers could have saved $243.44 on average by changing to the cheapest provider in their area.

According to the EA, there were 56,931 power connections in Whangārei and Kaipara and 31,498 in the Far North district last year. Close to 14,800 consumers switched suppliers in Northland in 2017.