Top Energy: We're in for a raw deal

COSTLY BUSINESS: Power lines can be expensive to maintain in the Far North, where storms can be savage, but that's not what's being a pending price increase.

Top Energy is warning is customers that they could be in for an "extremely draw deal" as the Electricity Authority (EA) consults on changes to the way electricity transmission is charged by Transpower.

Those changes, chief executive Russell Shaw said, could mean significant increases in the customers' bills of our customers. The EA says its proposal will lift the transmission component of Far North bills by as much as $266 a year, or 172 per cent.

"One of the alternatives on offer would be to increase transmission prices on future infrastructure investments only," Mr Shaw said.

"This would keep pricing at the status quo, and would be Top Energy's preferred option. However, in its consultation document, the EA says this option is 'the outer bound of the continuum of transition options.' In other words, their least preferred option."

Having reviewed the options proposed by the EA, and having met with the authority, Top Energy remained extremely concerned.

"We feel that the Far North could be given an extremely raw deal," he added.

"The increases under consideration call for our customers to subsidise the investment that has gone into keeping the lights on in Auckland by boosting and upgrading that city's transmission infrastructure.

"The EA is striving for a fair transmission pricing regime. Top Energy does not believe that changing the rules retrospectively is fair, and has said consistently that any new pricing regime should apply to future investments only.

"We fear that if these increases are introduced, many people in our communities will be tipped into fuel poverty. And it's a huge step back for the efforts to encourage commercial investment in our region. Our communities need economic stimuli, not greater operating costs for business.

"For years we have been upgrading our network at a prudent and sustainable pace. This has included buying the transmission assets at Kaikohe and Pamapuria, and the line that connects them. We have already made investments to replace these aged assets that were long overdue. But we have done this while capping our price increases to amounts that we felt our customers could afford, levels that were significantly below what we were allowed to charge by our regulator.

"We have taken responsible decisions reflecting the priorities of our communities and adopted innovative solutions to deal with supply issues instead of throwing money at them."

If those options were adopted by the EA they would undo that prudent approach, and hit Top Energy's customers with a massive financial penalty reflecting the investment that had gone predominantly into somebody else's electricity infrastructure.

Top Energy would be submitting in the strongest terms as part of the EA's consultation process, and was calling on its customers to do the same.