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Lines Companies Aghast at power price rise

Lines Companies Aghast at power price rise

The country’s electricity distributors are aghast at reports that Meridian Energy intends to increase the price of delivered electricity in Christchurch by 15%. Electricity Networks Association Chairman Warren Moyes says “This is yet another example of the double standard that’s applied to the combined generator-retailer groups, who consistently lift their charges to absorb the price drops that are sweated out of the lines industry.”

Warren Moyes says Meridian’s claim that the increase is needed to pay for the yet-to-be approved Project Aqua generation scheme on the lower Waitaki sounds like something from the high-handed Electricorp era. “Electricorp kept ramping up power prices to supposedly pay for future generation, which is like a manufacturer with a booming business lifting prices to pay for a new machine that will bring in even more profits. If it’s a viable investment Project Aqua then should pay for itself from future power sales, and if its not then it shouldn’t be built. Lines companies are facing a costly and largely pointless regulatory process from 2004, after achieving real price reductions for a number of years, while the generator-retailer groups seem to be able to charge what they like.”

The Networks Association says that there is far too little information available about the behavior of the state-owned generators. This latest move raises questions about whether a price rise is needed to help pay for Meridian’s speculative $600 million purchase of Southern Hydro in drought-prone Victoria, or the other 5 dams it owns in New South Wales.

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