Electricity - The Facts

  • Simon Upton

The Acting Minister Responsible for Energy, Hon Simon Upton, said today allegations relating to power price increases misrepresented the situation and avoided some key facts.

Mr Upton was responding to claims that power price rises in some centres were because of the Government's electricity reforms.

For example, Mr Anderton claims Southpower will charge consumers disconnection fees for switching to a different retailer. This is not correct. There is no need to disconnect when changing retailers.

Alliance leader Jim Anderton misquotes my colleague Enterprise and Commerce Minister Max Bradford (who is overseas this week) as promising power prices 'would drop 10% in April'. The government expects price decreases over time, particularly in wholesale electricity prices, but Mr Bradford has not promised 10% drops in delivered energy prices would occur immediately ECNZ was broken up.

"There are two real issues. Firstly, the current low lake levels have led to wholesale price increases. This is the market's proper response to the risks of a dry year. The Government is responsible for the reforms, but not the weather.

"The second issue is prices charged by lines businesses. These are natural monopolies which are not subject to competition.

"The Government has announced it will put in place a price control regime to ensure customers are not fleeced.

"It appears, for example, that lines businesses have sold their meters and no longer undertake meter reading, but many have not dropped their prices accordingly. Consumers should ask for explanations from their lines businesses and their owners.

In Christchurch's case, the owner of the Orion lines business is the local councils. Consumers should ask if the councils are demanding a higher rate of return from Orion, and if allowances will be made for the fact that Orion no longer carries out meter reading."

Mr Upton said the Government's electricity reforms mean that consumers can shop around for the first time to get the best possible prices from retailers.

In Christchurch there are at least three suppliers: Southpower, First Electric and United.