Increase is 'corporate welfare': Peters

Northland MP Winston Peters.

Big foreign companies will be winners under a proposal to increase power charges of up to 172 per cent per household in Northland, rather than the poor trying to make ends meet, Northland MP Winston Peters says.

The Northland MP and New Zealand First party leader questioned how on earth regions such as the one he represents in Parliament and the West Coast are supposed to develop when the price increase was massively greater than inflation.

He made the comments while reacting to a proposal by the Electricity Authority to grant national grid operator Transpower an annual increase of nearly $300 or up to 172 per cent per household in Northland in line charges.

Mr Peters said building corporate welfare, particularly for foreign-owned companies, was a hallmark of the National government.

"The winners are the foreign corporates like the Rio Tinto aluminum smelter at Bluff which saves 87 per cent on its megawatt per hour generation and load charge, and publicly listed Fletcher Building's Winstones subsidiary which gets a reduction of 90 per cent, saving millions of dollars a year. Small business, farms, the elderly and working mums and dads will be paying a high price to bolster private profits. This is not fair or right."

He said Northland lines' companies Northpower and Top Energy have not been demanding a price increase but would be blamed for it anyway.

Mr Peters said the resultant increase in line charges would then be used by right-wing elements to demand the break up of energy consumer trusts, thus enabling private interests to gain access to the trusts' billions of dollars of assets.

"This is not even a sophisticated attempt but the crude face of irresponsible capitalism," he said.

Te Tai Tokerau MP Kelvin Davis said the proposed increase, if granted, would result in a hike in demand for social services in the region.

"Te Tai Tokerau is the most poverty stricken area in the country, where people are already struggling to heat their homes and cook for their families," he said.

The Green Party also waded in, saying the electricity grid was a national asset that benefited everyone and people should not be financially penalised because of where they live.

The party's Northland-based list MP David Clendon said the authority's proposals would see major industrial power users like the Tiwai Point aluminium smelter saving $50 million annually while households in Northland and the West Coast pay about 10 per cent more for their power.

"Families shouldn't be forced to switch off the heater or go off the grid so a taxpayer-subsidised smelter can benefit by tens of millions of dollars."