KEY POINTS:
Elderly people are staying in bed all day or walking about huddled in blankets and dressing gowns because they cannot afford to heat their houses, the parliamentary commerce select committee was told yesterday.
Grey Power energy committee spokeswoman Molly Melhuish said the low fixed charge proposed as part of the Government's Electricity Disconnection and Low Fixed Charges Amendment Bill would not help elderly consumers, saving them on average only $2 a month.
Instead, Grey Power would like to see the Government consider progressive pricing - a system that would give people an entitlement to a certain amount of power at a reasonable price.
The bill, which passed its first reading in August, would give the Government greater powers to regulate power companies.
It proposes raising the threshold for low fixed charge eligibility from 8000 kilowatt hours a year to 9000kWh for domestic consumers in Christchurch and south of the city.
The legislation was hatched immediately after the death of Mangere mother of four Folole Muliaga in May after Mercury Energy cut power to her home, causing the oxygen machine she was using to shut down.
Yesterday, Ms Melhuish said progressive pricing would create individual entitlements to a fixed level of "reasonably priced" electricity.
Power used over and above the base entitlement would attract extra costs.
The proposed scheme could encourage energy conservation while still allowing economic competitiveness.
The entitlement would take into account the varying requirements for different climate zones.
Under questioning from the committee chairman, independent MP Gordon Copeland, Ms Melhuish agreed low fixed charges did not work in favour of the elderly.
The aged often had high energy needs, as they needed to heat their houses during the day as well as at night.
"Many, many elderly are in a position where they can't afford it and so they stay cold in an unhealthy house," Ms Melhuish said.
Supporting her submission, Pat Herbert of the Returned and Services Association said that every winter it received reports of elderly people staying in bed because they could not afford to keep their homes heated.
"And this is not just a handful, it's many, many hundreds of cases we hear about each year."
Both agreed the reason low fixed charges, introduced in 2004, worked for some older people was that they were staying under the threshold by not heating their houses properly.
Trustpower chief executive Keith Tempest agreed the move to low fixed charges had failed to deliver.
Some customers were paying less for their electricity, but this was because people using more than the 8000kWh were subsidising them.
Trustpower supported the bill in relation to regulation of disconnections, but opposed the amendments relating to low fixed charges.
- NZPA
