08 July 2004

Hodgson to introduce targeted relief on electricity bills

Minister of Energy, Pete Hodgson, has confirmed that some aspects of power prices are to be regulated. The move follows recent calls for intervention on rising power prices from the Consumers' Institute and other bodies.

"I have been concerned about the impact of rising power prices on low income groups for some time and have decided to make the low fixed charge tariff compulsory," says Mr Hodgson. "Some companies had been playing games around offering such an option."

Work on this regulation pre-dates the latest round of power price rises.

"I instructed officials to draft regulation on this issue some months ago. It will compel all electricity retailers to offer a tariff, the fixed charges portion of which cannot exceed 30 cents per day excluding GST. This tariff is designed to make those consumers that use less than the average 8000 kwh of power a year better off. In particular, it is designed to help older New Zealanders on fixed incomes who are typically frugal users of power."

The regulation will be gazetted next month and come into force on 01 October this year. The regulation will also require companies to give equal advertising effort to the low fixed charges tariff. This action is being taken as some companies have been slow to publicise the option which has resulted in a slow uptake of it.

ENDS

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