Farmers Back Commission

28 November 2005

Farmers Back Commission

Federated Farmers supports the Commerce Commission's strong warning to Transpower over the grid operator's huge price increases, said Don Nicolson, Vice President of Federated Farmers of New Zealand (Inc).

"The Commerce Commission is right to be firm with Transpower, particularly since the state monopoly is already under investigation by the commission for breaching price thresholds and thereby overcharging consumers," said Mr Nicolson.

Transpower may only raise prices by the rate of inflation minus 1%, unless the price increase is for investments approved by the Electricity Commission.

"Transpower's much larger price increases (19 percent in March 2006, and average of 13% a year over the next five years) are being justified on the ground they are needed to fund upgrades to the national grid. But the increases have been announced before the Electricity Commission has started to consider whether to approve the proposed upgrades," Mr Nicolson said.

"Today's long-suffering power consumer shouldn't have to pay higher charges now to fund a programme of capital expenditure that may not be approved," he said.

"Farmers are frustrated that Transpower fails to recognise the rights of consumers and the owners of land over which its pylons stand," said Mr Nicolson.

ENDS

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