Brownlee tells power users to shop around

More expensive natural gas for its power stations has prompted Contact Energy to raise its electricity prices by 5 per cent. Photo / Greg Bowker.

Energy Minister Gerry Brownlee is encouraging householders to shop around for their power as Contact Energy raises its electricity prices.

About 300,000 Contact customers will be charged 5 per cent more from next month, although customers in Wellington, Hawke's Bay, Gisborne and Christchurch are still subject to a prize freeze.

Contact has progressively advised customers in various regions throughout the country since late last year that prices would be rising.

About half of all Contact's customers throughout the country have faced a price rise in recent months, including those in Northland, Southland and Marlborough.

Contact spokesman Jonathan Hill told the Dominion Post that, in the 2009 financial year, the price of gas for power stations increased about a quarter.

"The electricity price is increasing to cover the cost of power stations, which are not being met, and to enable investment in [new] power stations that the country needs," he said.

Gas prices rose last year as the more expensive gas replaced the cheap gas being extracted from the giant Maui field off Taranaki.

Electricity prices were also rising because of higher power lines charges.

Contact increased its gas prices by an average of 5 per cent on January 1 for about 65,000 residential and business customers, blaming the rise on a 25 per cent increase in the price it pays for wholesale gas.

However, Brownlee questioned why Contact had to raise its prices and customers needed to shop around to see if they can get a better deal.

He also told Radio NZ the Government was looking at how power retailers were marketed and regulated.

However, he ruled out exempting power from any increase in GST.

- NZPA