Electricity Line Company Prices Still Frozen

ELECTRICITY NETWORKS ASSOCIATION

Electricity Networks Association Chairman Warren Moyes says that the price freeze offered to Energy Minister Pete Hodgson by over 90% of the lines industry last year remains in force, at least through to August. This is despite the current power supply problem placing increasing pressure on line services where energy is flowing from alternative sources.

The Networks Association negotiated its current price freeze with Pete Hodgson in 1999, and extended it last year on the basis that the great majority of its members had agreed to freeze prices for their own services but would reserve the right to pass through any imposed additional costs for services such as the transmission contracts they have with Transpower, the national grid operator.

“The electricity lines business is largely community owned in New Zealand, and is very aware of the pressures that rising energy prices this winter could place on consumers”, Warren Moyes says. “In May, the Networks Association highlighted Ministry of Economic Development figures that showed falling prices and moderate profit levels in the electric lines business over the year to last August. While some line companies have pricing structures designed to signal true costs at different times of year, parties buying services from almost all companies involved in the lines industry can be confident that prices will not increase, and that the real price of lines services will again fall this year.”

Ministry of Economic Development Data released last month showed that, between August 1999 and August 2000, average line charges for a standardised small domestic consumer (6,000 kWh pa) fell by about 2.8% in real terms. Over the same period, the line charges for a medium commercial consumer (18,000 kWh pa) fell by about 3.7% in real terms.

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