Vector keeps network fees down

By Mark Reynolds

Electricity consumers on the Vector lines network are paying less in power transmission fees than almost any other power users in New Zealand, according to latest Ministry of Commerce data.

Vector - formerly part of Mercury Energy - charges 5.63c per kW hour in line fees, according to the ministry's latest statistics.

That compares with 6.31c per hour charged by United Networks in its lines business north of the harbour bridge and the 6.08c per hour charged by United on its Wellington network. Vector's fees are also less than the 6.95c an hour transmission fee charged by Orion in Christchurch.

Vector has the benefit of a concentrated customer base in central and South Auckland, but that is offset by having to pass on the cost of transmitting power up the country from generation plants that are mainly in the South Island.

The only cheaper lines fees are Mainpower's 5.49c charge in the North Canterbury region and Waipa Networks 4.94c per hour for its 14,000 customers.

The nationwide high for transmission charges was CentralPower's 10.34c hourly fee for Manawatu consumers.

The lines fees are separate from the energy component of power bills that are charged by retail companies such as Contact Energy, TransAlta, Mighty River Power, Meridian Energy and First Electric.

Electricity law changes the Government introduced last year were aimed at making the lines fees more transparent, so that the transmission charges were not used to subsidise retail costs.

Vector chief executive Patrick Strange said his company was pleased its lines fees for users in Auckland were among the lowest in the country, especially because costs were being contained despite major network investment.

"This year we've committed to spend more than $100 million on improvement to our network that will provide the power to meet Auckland's growth."