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Contact passing on changes in lines company charges

25 February 2014

Contact passing on changes in lines company charges

Contact has begun notifying its customers of changes to their electricity costs due to increases in the costs charged by local lines companies, effective 1 April 2014.

These changes relate to the network and transmission portion of a residential or small business’ electricity bill (approximately 40% of the total electricity bill) only, and do not include any change to the energy or service related costs which Contact has committed to holding flat until at least April 2015.

Each of the 29 local lines companies in New Zealand set their own tariffs and charges. While the average bill increase as a result of the changes is 2.6%, there are some regions where the price changes are much higher.

At Contact’s recent half year results presentation, Dennis Barnes, Contact’s Chief Executive, commented that the ability for electricity retailers to innovate new products and offerings for customers is stifled by the complexity of the existing lines companies’ pricing structures.

“While we support lines companies earning an adequate return on their assets to ensure the long term security and reliability of New Zealand’s electricity network, the inherent complexity of having so many different tariffs and cost structures in such a small market is not providing the right environment for the market to efficiently innovate new retail products” said Mr Barnes.

ENDS

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