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Axing Of Fixed Charges Challenge To Industry

Axing Of Fixed Charges Challenge To Electricity Industry - Greens

Green Party co-leader Jeanette Fitzsimons is hailing the move of Christchurch energy lines company, Orion, to eliminate fixed charges as a long overdue challenge to businesses and the whole energy sector.

Orion announced today that it will eliminate fixed charges for residential users and small and medium sized businesses. However Ms Fitzsimons said whether these changes will benefit consumers will depend on how power companies change their electricity prices.

Lines companies no longer deal directly with consumers, but charge the power suppliers who then 'rebundle' the charges in their own tariffs.

Ms Fitzsimons said Orion's move shows there is no real need for fixed line charges around the country. She said other lines businesses should emulate Orion's actions.

"The Government has proposed that consumers should have access to an optional, low fixed charge tariff under its electricity reform proposals. Orion's move means there ought to be almost no fixed charge on anyone's electricity bill in the Christchurch area," she said.

"This move from Orion poses a direct challenge to the Government's electricity regulatory regime. If fixed charges in Christchurch exceed ten or fifteen cents a day for anyone after 1 April, the energy businesses are in effect ripping people off.

"I will be watching closely to see if other lines' businesses follow suit. If a publicly owned company can achieve these levels of efficiency, I expect the Commerce Commission and other industry watchdogs to use this as a benchmark to assess the large private lines businesses elsewhere in the country."

Ms Fitzsimons said eliminating fixed charges made it even clearer to people that saving power will save them money.

"It's the best of both worlds," she said. "Putting money in the pockets of those who need it while preserving the incentive to save energy".


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