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Impact on the economy due to electricity crisis

Impact on the economy as a result of the wholesale electricity market crisis – to 23 March 2003

”Since 1 March this year a limited survey of some major electricity users’ have reported lost sales of approximately $3.7 million as a result of having to respond to the extraordinary high prices in the wholesale market,” said Ralph Matthes, Executive Director of the Major Electricity Users’ Group (MEUG). Forced demand reductions in response to these prices by these large users’ have year to date totalled approximately 14,200 MWh.

“Last week spot prices averaged over 20 c/kWh (final figures are not yet available so this is just an estimate). In comparison an average household pay about 7 c/kWh for energy as part of their power bill (and just over 13 c/kWh including line charges).

“In most cases the lost production reported cannot be recovered because these manufacturers had planned to operate 24 hours a day, 7 days a week.

“We are waiting for a response from Government to our request of 19th March to appeal to all classes of consumer to conserve electricity immediately, examine means to manage the uncertain supply situation and to investigate profit levels of SOE generators. We are also waiting for a response to our request to Meridian Energy on 19th March on why their offer prices have increased so drastically,” concluded Mr Matthes.

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