Disclosures fodder for planned power review

By RICHARD BRADDELL

WELLINGTON - Consumers are paying more for power, according to Government figures.

Ministry of Commerce figures, issued by Energy Minister Pete Hodgson yesterday, show that, after adjusting for inflation, electricity prices for smaller domestic users rose 3.4 per cent in the 18 months to August 1999. Those for larger domestic users increased 2.6 per cent.

Partly offsetting these rises were smaller percentage reductions in line charges, which make up a smaller proportion of most electricity bills. However, Mr Hodgson said these changes probably reflected the removal of metering charges from the definition of line charges, rather than a real decline.

The minister's office said the numbers in the disclosures did not answer any of the arguments besetting the industry, and that was why the Government's inquiry into the industry was needed.

The setting of terms of reference, appointment of personnel and budget are now in their final stages. Announcements are likely from as early as next week.

Meanwhile, energy-watchers have to live with the ministry's somewhat imperfect statistics.

Energy charges are based on those of incumbent retailers. The figures do not include the recent price increases in Northland, South Auckland, North Wairarapa, Manawatu, Dunedin and Invercargill.

The ministry has also complained that line companies not only missed disclosure deadlines, but often failed to comply with the detail requested.

"Line owners will have to improve their disclosures this year," Mr Hodgson said.

Noting that aggregate value of line businesses fell slightly to $4.3 billion in the March 31 year, he said the Government was determined to prevent companies inflating their asset values to justify higher profits.