Electricity line charges will decrease from 1 April 2015

Electricity line charges will decrease from 1 April 2015

Gisborne, East Coast and Wairoa electricity customers could see a 1.57 percent decrease in line charges from 1 April 2015, according to Eastland Network general manager Brent Stewart.

The company, which is part of Eastland Group, today announced its pricing schedule for the 1 April 2015 to 31 March 2016 period.

Mr Stewart said Eastland Network’s pricing tariff structure had not been altered, but the new pricing schedule included an overall decrease in revenue of 1.57 percent.

In New Zealand’s highly regulated electricity sector, electricity line charges include both distribution and transmission costs, and Eastland Network’s pricing schedule must adhere to the Commerce Commission’s Default Price Path Determination 2012.

“This is what sets Eastland Network’s maximum allowable line charge revenue. This year, for the second year in a row, there has been zero percent increase in Eastland Network’s distribution revenue,” said Mr Stewart.

“But a 6.13 percent decrease in our transmission revenue ensures we meet Commerce Commission requirements. And we have also seen a slight reduction in transmission costs as a direct result of the transfer of Transpower’s high voltage electricity transmission assets to Eastland Network from 31 March 2015.”

Mr Stewart said Eastland Network’s line charge revenue for the 2014-2015 year had been forecasted at $33.38 million, but would now decrease to an estimated $33.23 million in the 2015-16 year, a reduction of around $150,000.

Eastland Network provides electricity to 19,220 domestic consumers and 6,245 non-domestic consumers in the Gisborne, East Coast, Wairoa and Tuai areas. It bills line charges to the end-user customer’s energy retailer, which then incorporates them into each customer’s power bill.

Line charges make up around 40 percent of consumer power costs. The remaining approximate 60 percent of costs are determined by energy retailers.

For an average domestic consumer the new pricing schedule could represent a decrease in line charges in the order of $1.80 (including GST) per month, but it is up to electricity retailers to pass on the potential savings to their consumers.

ENDS

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