Mighty River Power commits to no energy price rise in 2014
11 December 2013
Mighty River Power commits to no energy price increase in 2014
Mighty River Power has today announced a commitment to no increase in headline energy prices for the Company’s residential electricity and gas customers until at least 1 April 2015.
Chief Executive, Doug Heffernan, says the Company will be holding customers’ energy prices – which make up typically 50-60% of household electricity bills – at the same level as set in April 2013.
Dr Heffernan says at the time of the Company’s IPO the Company forecast no increase in effective retail prices in 2014. This has now been confirmed in Mighty River Power’s energy pricing schedule for the Company’s brands including Mercury Energy, ahead of the announcement of charges from local lines companies and Transpower, expected to be set in the next two months.
“We are now confirming that for our customers there will be no increase in our energy prices for a further 15 months. However there will likely be changes in customer pricing from 1 April due to variables over which we have no control that we pass through on our bills – such as transmission and distribution charges and any increases in metering costs due to regulatory requirements.”
He says the impact on customers’ bills of these charges, which are mostly regulated by the Commerce Commission, will be announced as soon as they are known and confirmed by the relevant companies.
Dr Heffernan says the ‘no energy price increase’ commitment reflected the fact that New Zealand has one of the most competitive electricity markets in the world, as highlighted by PWC’s Leading Energy report released last month.
“Our decision to hold energy prices is the result of a healthy, well-functioning electricity market that has, by global measures, delivered positive outcomes for both customers and the country, enabled by the multi-billion dollar investment in renewable generation capacity by a number of competing generators over the last few years.
“Retail electricity prices in New Zealand are very much middle of the pack of developed countries, and consistent with average income levels. Putting this in local terms, the latest Statistics NZ economic survey shows spending on electricity is a relatively stable component of household budgets, making up about 3.6% of total net household expenditure in the year to 30 June 2013 – down from 3.7% in 2010."