Contact defends ETS pricing decision
Contact defends ETS pricing decision
June 30 (BusinessWire) - Contact Energy today rejected "any implication that we are using the emissions trading scheme to cover for inflating prices."
"We are not," said managing director David Baldwin, in a statement that follows Prime Minister John Key's singling out Contact over ETS-related price rises this week, and a Commerce Commission warning this morning that companies blaming unrelated price rises on ETS or GST increases could face action under the Fair Trading Act.
Only Contact and
MightyRiverPower's retail arm, Mercury Energy, have said
they are raising prices to account for the impact of the
ETS, prompting Key to observe that the power company most
affected by the ETS is Genesis Energy, which burns coal at
the Huntly power station. Genesis has said it will not
change its pricing because of the ETS.
Contact says
the ETS will raise tariffs by 3.2%, "very much in line with
the government's estimate of ETS adding 5% to the cost of
electricity."
The company faced criticism from Key
and Energy Minister Gerry Brownlee over claims that its
tariffs were increasing between 10% and 17% for customers in
Dunedin, whose power prices had not changed since November
2008.
However, the average price rise for Dunedin
customers is only 6%, Contact says, excluding the ETS component.
"The reason for the bulk of the
increase in Dunedin is not related to the ETS, but reflects
increasing costs ... of generating electricity, building new
power stations, purchasing gas, (and) providing retail
services," Contact told BusinessWire.
(BusinessWire)
16:16:05