Time for retailers to fully explain power bills

9 July 2004

Time for retailers to fully explain power bills

The Chief Executive of the country’s second largest electricity lines company today said retailers should be compelled to fully itemise all of the costs on a customer’s electricity bill.

Powerco Chief Executive Steven Boulton said retailers were routinely sending power bills which were confusing customers as to where costs were actually being incurred.

“At the moment, retailers are hiding the true costs, and the areas where cost increases have come from, behind confusing repackaging of the costs in the power bill,” he said.

“This is resulting in customers being misguided.

“For example, many consumers assume that the fixed daily charge on their electricity bill is the lines charge when, in fact, it includes additional charges from the retailer.

“Government are now regulating to force retailers to offer low fixed charges to domestic customers, which has resulted in lines companies being unfairly captured in the proposed regulatory legislation when they were already fully complying on a voluntary basis.”

Mr Boulton said electricity lines companies had repeatedly asked for retailers to fully itemise their bills so that consumers had accurate information.

“Lines companies strongly support transparency in pricing because we are keeping our costs down and delivering continued value to consumers,” he said.

“Over the last five years the vast majority of electricity price increases have been driven by retailers. Lines companies are not responsible, but retailers often blame them for their own increases, or camouflage their increases in the structure of the customer’s bill.”

Mr Boulton said over the last five years Powerco’s average line charges had changed at less than the national rate of inflation which equalled a price decrease in real terms.

Across all of the areas in which Powerco operates, average retail prices have increased by 16.7 per cent while lines charges have decreased by 0.9 per cent over the last five years.

Over this time the generation and retail component of power bills has increased from 49 per cent to 57 per cent while the line component has decreased from 51 per cent to 43 per cent.

“Customers have the right to know this information and the retailers need to comply with the requests of customers. Retailers need to be held accountable for these price increases instead of trying to move blame onto others in the sector,” said Mr Boulton.

“Powerco would fully support the Government in requiring retailers to fully itemise their bills as part of moves to regulate the retail sector.”

ENDS

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