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Authority Must Be Reined In Before It Increases Power Prices For Vulnerable Consumers

Today’s decision by the Electricity Authority (the Authority) to push through fundamental changes to the way Kiwis pay for power will hurt vulnerable households and businesses and must not proceed, the Transmission Pricing (TPM) Group[i] says.

The Authority today announced a decision that will change how we all pay for the national electricity grid which, once implemented, will see consumers in areas like Northland, Auckland and the Bay of Plenty pay more.

With the Authority seemingly unwilling to listen, our group is calling on the Government to urgently issue a Government Policy Statement that would make the Authority consider the impact of its decisions on local communities that are facing energy poverty.

This would align with the Electricity Price Review Panel’s advice to the Government that "the question of whether and how much transmission pricing changes should affect users or regions is best settled with clear guidance from elected governments… A government policy statement is an effective way for the Government to express its policy objectives and whether it is generators, or households and business consumers in poorer regions such as Northland and King Country, that should benefit from lower transmission charges."

"We are facing a once in a generation economic crisis. It beggars belief the Authority would choose now to make these changes, when so many households and businesses are facing such uncertainty" the TPM group says.

"And once again the Authority has not produced a fit-for-purpose cost benefit analysis to justify progressing with these reforms. The benefits identified by the Authority are simply not real.

"Last month we called on the Authority to delay this decision by 12 months, but that was ignored.

"The Covid recovery and the strategic review of one of the country’s biggest electricity users, the Tiwai Point Aluminium Smelter, could both impact New Zealand’s electricity market significantly. The Authority must take the time to properly assess the impact before they push ahead with these changes.

"It is consumers in some of our most vulnerable regions, such as Northland, who face the steepest price increases as a result of the reforms announced today. That simply isn’t fair.

"Progressing with reforms that separate New Zealanders into winners and losers, without materially benefiting the country overall, cannot be justified. Especially in a time of economic crisis.

"It’s not just our group that is concerned about the impact on consumers. In a submission in 2019 Transpower, the state-owned enterprise that will have implement these changes, said that the Authority’s proposals would "exacerbate the energy affordability problems afflicting too many consumers".

"Such a statement should be extremely concerning to a Government that wants power prices to go down.

"The Government must act now to rein in the Authority in the interests of all New Zealanders", the TPM groups says.

[i] We comprise organisations from right across the electricity sector including large consumers, energy consumer trusts, stakeholder groups, electricity network companies, and electricity generators and retailers. Current active members of the TPM Group are:

-Counties Power

-EMA Northern

-Entrust

-Federated Farmers (Northland and Auckland)

-Horizon Networks

-Northpower

-Norske Skog Tasman Ltd

-Oji Fibre Solutions

-Top Energy

-Trustpower

-Vector

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