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Electricity crisis index of cost to commerce


Electricity crisis index of cost to commercial sector – to 11 April 2003 lost manufacturing sales total $12.4 million

”The economic impact of the electricity market crisis to the industrial and commercial sector has reached $12.4 million in lost sales since 1 March due to forced demand reductions. In addition businesses that must continue supplying products and services to consumers have paid $10.1 million above the unit price paid by households for their power. The weekly survey consists of all MEUG members and an increasing number of medium and small enterprises affected by the crisis.

Ralph Matthes, Executive Director of the Major Electricity Users’ Group (MEUG), said “the Minister of Energy this morning said the spot prices in the market were untenable – manufacturers paying the extraordinary prices currently in the market say they are extortionate and a clear signal that the generators are focussed on their own short term gain and damn the rest of the economy. There is no rationale that can justify prices of 70 c/kWh recorded in several half-hour trading periods last Friday, other than either gross profiteering by generators or gross incompetence in their trading rooms. This behaviour by generators is tearing the heart out of end user businesses.

“Forced reduction in demand by enterprises since 1 March affected totals 54,000 MWh.

“For the week ending Friday 11th April 2003 spot prices averaged 22.5 c/kWh at Haywards. The week before spot prices averaged 15.7 c/kWh. In comparison the energy cost of an average households power bill is about 7 c/kWh (and just over 13 c/kWh including line charges).

“The graphs on the next page summarise the lost sales and additional spot purchase costs from those surveyed by MEUG and the Haywards spot price relative to that paid by households since 1 March.

“MEUG is determined that this time around, Government policy and the market structure will be thoroughly reviewed, with real long-term changes made,” said Mr Matthes. “In the meantime we want the voluntary savings campaign to be more visibly supported by Government Ministers actively endorsing appeals to the public to save power. Both central and local government need to take more leadership by announcing high profile examples of immediate saving initiatives within their sector.


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