Rising power prices: PM takes aim

Transmission body says its proportion of domestic power bills is small and any increase would be $1 a month.

Big rises in household power bills are largely because of higher charges from Transpower to recover the cost of recent national grid upgrades, says Prime Minister John Key.

But while Transpower confirmed it had increased charges, it says they should add little more than $1 a month, a fraction of the increases consumers are facing.

Consumers in Wellington and Auckland have recently been told by power companies, including Genesis and Meridian, of big increases in their daily fixed charges which are only partly offset by small decreases in per unit charges.

The net effect will be many households paying 7 to 8 per cent more for their power, although some face increases of up to 24 per cent.

Power companies and lines companies are pointing the finger at each other over the increases, but industry watchdog the Electricity Authority says it will check their claims andalso work at increasing the quality and transparency of retail priceand billing information.

But Mr Key yesterday said the market was "operating relatively transparently for a very complex environment".

"As far as we can see, the price increases that some electricity companies are indicating to consumers that they intend to apply are a result of the increasing costs they face because of the upgrade of the grid by Transpower or other lines companies.

"We ourselves know just the billions and billions of dollars that Transpower's put into the grid, they are ultimately charging in order to recoup that."

But a Transpower spokeswoman said its transmission charges made up only a small part - less than 10 per cent - of household power bills.

"Even after these upgrades, we expect our proportion of your bill to remain below 10 per cent."

Labour energy spokesman David Shearer said confusion over the drivers of the increases was why he was putting forward a member's bill to break down domestic power bills into retail energy and transmission/distribution charges.