Mercury Energy Announces Electricity Price Increase

Mercury Energy Announces Electricity Price Increase

Electricity prices will rise by an average of 5.8% for Mercury Energy’s residential customers from 1 April 2012.

The price change includes an increase in the charges passed through to customers by Mercury Energy from the local lines company, which account for around 40% of a customer’s bill and support the maintenance of lines and transmission infrastructure. This year’s lines increase of an average of 3.7% on a customer’s total bill reflects a significant rise in transmission charges from Transpower. These charges support major investment in New Zealand’s National Electricity Grid, improving grid security. Prices and revenues for transmission and for most lines companies are regulated under the Commerce Act, and the Commerce Commission approves maximum prices and revenues for them.

The remaining portion, about 60% of a customer’s bill, comprises of the energy charge, which Mercury Energy determines. The energy price rise represents, on average, an increase of 2.1% on a customer’s total bill.

Mercury Energy’s General Manager James Munro said “investment in electricity infrastructure is essential if New Zealand homes and businesses are to have a secure supply of energy as the economy and population grow, and this has been recognised by the Commerce Commission.

“Some good examples of this investment are the progress on the North Island Grid Upgrade project and the expansion of the HVDC inter-island link. Both of these projects strengthen grid capacity and enable the generation projects in geothermal and wind that are growing New Zealand’s renewable energy base, supporting customer demand.”

Mercury Energy will not be reviewing its standard residential electricity prices again before April 2013.

ENDS

Note to editors:
• Average price changes do not include price changes for customers in Nelson or Selwyn Heights Mercury Energy has not yet received confirmed 2012 lines charges for customers in these areas.
• The lines increase for customers in Christchurch includes the pass-through of the April 2011 lines price increase, which Mercury Energy has absorbed over the past year.
• With respect to customers in Christchurch, Mercury Energy would not usually review its prices again until April 2013. The company will follow this standard process unless an additional lines price increase is implemented to support the major investment required to repair lines infrastructure in Christchurch. Any such additional increase by the local lines company would require regulatory approval.
• The table below sets out the average energy and lines price rises for residential customers in regions across New Zealand

Region Average energy increase (on total bill) Average lines increase
(on total bill) Average overall increase
Auckland
2.1% 3.8% 5.9%
Hamilton
2.0% 3.2% 5.2%
Taupo
2.1% 4.0% 6.1%
Rotorua
2.2% 4.3% 6.5%
Palmerston North
2.1% 3.2% 5.3%
Wellington
2.1% 2.7% 4.8%
Christchurch
2.4% 4.1% 6.5%
Dunedin
2.4% 2.6% 5.0%