"This will kill us."

That was facilities manager Doug Klever's reaction to news that Switzer Residential Care's power bill will increase by more than 20 per cent when the Kaitaia rest home's contract with Mercury expires on January 25.

Mr Klever said he had to check with general manager Jackie Simkins to be sure he was interpreting the new figures correctly. He was, Ms Simkins saying the added cost, around $20,000 a year, would wipe out the home's modest annual surplus.

"We've been with Mercury for 12 months. They offered us a good deal, and now they do this," Mr Klever said.


He was now frantically contacting other electricity suppliers in the hope of finding something cheaper, but while some were cheaper than Mercury, the best deal he had found as of yesterday would still represent an increase of more than 10 per cent.

Any increase, he added, would really begin to hurt in May, when the home's need for heating would begin to rise sharply.

Meanwhile Genesis customers in Northland will also pay more for power from next month, prompting fears from a Far North budget adviser that some families won't be able to cope.

Coralee Shortland, co-ordinator of the Bay of Islands' Budgeting Services Trust, also queried the justification for a $100 per annum increase in residential prices for those Top Energy customers and $83 in Whangarei and Kaipara, effective from January 16.

According to the Electricity Authority, Genesis is the fourth-biggest power retailer in the Mid and Far North with 3080 customers, behind Contact, Mercury and Trustpower.

A Genesis spokesman said the increases were the result of an annual review of pricing, which took into account factors such as inflation, generation costs and wholesale prices.

The changes would not take effect for customers who were currently on fixed price contracts until those contracts expired.

Ms Shortland said the impending price rise meant an increase in living expenses for families trying to make ends meet, on top of higher petrol prices and rents.

"Do they really have to go up? I doubt it. It's all about profit," she said.

"I don't know how families are going to keep up with another rise."