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Proposed Pricing a Regional Tax by Stealth

Proposed Electricity Transmission Pricing a Regional Tax by Stealth

Source: EMA

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EMA is calling the Electricity Authority’s (EA) proposed pricing regime changes a regional tax by stealth.

Under the proposed changes, EMA’s members are facing significant increases in their electricity pricing with no right of recourse.

Auckland customers will foot a near $80 million dollar increase, Whangarei customers face a 58% increase, and customers based further north in Kaitaia, Kerikeri and Kaikohe face an increase of 121%. Members in Eastern Bay of Plenty also face significant increases.

Other areas isolated from the national grid and needing assistance with regional development, such as Westland, are the big losers while the main beneficiaries appear to be the big South Island generators and the already heavily government subsidised aluminium smelter at Tiwai Point.

"This is a tax by stealth on our members, and for some of them it will severely impact their business," says Kim Campbell, CEO, EMA.

"There are peverse outcomes where changes to electricity pricing will take more out of areas such as Northland than the Government provides to the region in economic development initiatives."

Small to medium sized businesses in Auckland face increases of $1500 per annum, and those needing high voltage connections (such as schools or hospitals) may be paying an additional $22,000 per annum.

"Other members who are large scale energy users are looking at multi-million dollar increases," says Mr Campbell.

"We challenge the thinking behind this proposal, which appears to be more about subsidising Meridian and Tiwai Point who coincidentally benefit by $80 million, rather than sound policy for the national good. We dispute the thinking that Auckland, in particular, is getting a superior service and therefore needs to pay more than other parts of the country. The grid has already been paid for, and we believe the EA should maintain its current pricing regime, which distributes costs across the board."

ENDS

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