4 Cent electricity price effect from petroleum dev

Four cent electricity price effect from petroleum development: government action needed

A new government initiative is estimated by DEUN to add four cents per unit to domestic electricity prices.

Petroleum exploration and development would link New Zealand's gas prices to international oil prices, so gas would become too expensive to be used in bulk for power generation. Timing of any resulting price increase will be a matter of government policy.

Already a quarter of New Zealand householders cannot afford to keep their houses warm - even before income losses caused by the recession.

A four cent price rise would not only greatly increase energy poverty, but also create further windfall profits to the electricity companies. Electricity retailer-generator companies made $340 million net profit after tax in 2007.

DEUN calls on Government to require each electricity retailer to report publicly on the number of its customers who have reported problems in paying their power bills, and how it has assisted them. We expect this number to rise steadily in the next few years.

Household energy efficiency is the only sustainable answer to easing the rising costs of energy. DEUN welcomes the fact that EECA has just re-advertised its scheme for retrofits for middle-income householders. We do hope that full subsidies for low-income householders will be similarly promoted.

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Contact Molly Melhuish, analyst, Domestic Energy Users Network (DEUN)

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