Stewart Island power price backtrack

Photo / File

The Southland District Council is preparing to soften the impact of electricity price hikes on Stewart Island after outrage from residents, businesspeople and holiday home owners.

Consumers on the island's tiny diesel-generator electricity network were facing an 84 per cent increase in monthly connection fees, from $52.74 to $96.98, coupled with reduction of 5c per unit in usage charges.

Many took exception to the hike in connection fees. Twenty nine individuals or families wrote to the council last month saying it was too much, especially for the elderly and young families.

Ian Harrison estimated annual electricity costs at his holiday house cost would increase from $730 to $1250, while others said the increase might lead to many homeowners leaving the scheme and using private generators.

The increase was "massive", Margaret Fairhall said.

The comments had led to a rethink, council services and assets group manager Ian Marshall said this week.

The connection fee was now proposed to be $85 per month - a 61 per cent increase - along with a 3c reduction in unit prices, which would take the price per kW hour to 57c.

"It is an attempt to even things out ... we recognised the amount of hardship the increase in monthly fees would have on low-income people, and that low users [holiday home owners] would be most affected."

The new prices had not yet been approved by the council but would be considered at a meeting on June 26, he said. If approved, they would take effect from July.

The Stewart Island Electrical Supply Authority was run as a "break-even business", he said, and the rise was needed to raise $67,200 in the 2013-14 financial year to help pay for operational costs and to establish a depreciation fund for future plant and network renewals, Mr Marshall said.

The scheme was "entirely dependent" on big operators such as the hotel, the fish-processing factory and the council, which used electricity to power its sewage pumping and disposal scheme, but needed its smaller consumers as well.