Electricity PricesEnterprise and Commerce
The Acting Minister for Enterprise and Commerce, Hon Simon Upton, today welcomed the announcement by Contact and Mercury that they would not increase retail prices and urged Trans Alta to reconsider its proposed increases.
Contact has 350,000 retail customers in mainly provincial areas plus Dunedin. Mercury has 220,000 customers mainly in Auckland.
"Competition is only getting underway in earnest with the split up of ECNZ on 1 April and the introduction of profiling, which facilitates competition between retailers.
"Already we have seen quite dramatic falls in wholesale spot prices since 1 April, from around 7c kWh to below 2c. Clearly these very low prices are not sustainable but they do signal the impact of vigorous competition.
"Retail competition is also expected to bite although probably more slowly", he said.
"Consumers themselves have a crucial role to play here. If they don't like price increases they should shop around."
Trans Alta has proposed price increases in Auckland, Wellington and Christchurch. Alternative suppliers are available in those areas. For example, Contact, which is not increasing its prices, supplies in Auckland and Wellington.
First Electric, which has undertaken to keep its prices lower than Trans Alta, supplies in Auckland, Wellington, Christchurch and the Bay of Plenty region.
In most cases it costs nothing to change suppliers. Disconnection and reconnection charges do not apply when customers simply change retailers.
"Consumers increasingly have choice. If they want the best power prices they need to exercise customer power," Mr Upton concluded.