Children in homes with prepaid power meters risk developing bronchial illnesses because many families run out of cash to keep the meters topped up, experts say.

A tiny King Country town which depends on tourism could go off the national grid because of crippling lines charges for power.

Household power bills have risen by up to $316 this year, and lines companies and retailers are blaming each other for the increases.

Rio Tinto's attempt to renegotiate New Zealand's largest electricity contract, for its aluminium smelter at Bluff, comes as the company's chief executive warns of "difficult decisions" ahead.