Editorial: Power hikes hurting those most in need

It's alarming to hear some families in the Far North are being forced to use candles for lighting because they can no longer keep up with the spiralling cost of electricity in the region.

The latest power price survey by the Ministry of Economic Development shows some Northlanders are paying 25 per cent more for power than the same time last year. The Far North, one of the poorest regions in the country, has seen some of the nation's biggest price hikes, with Meridian's charges going up 25 per cent in the year to May 15.

Top Energy line charges, which are paid by all Far North power users, went up 24.5 per cent. For an average family using 8000kWh per year, that means an annual power bill $800 higher than last year's - a significant blow to any household budget, especially if the family is already struggling to make ends meet.

Now, we learn that the increasing cost of power will also be reflected in the rate bills of Far North residents. Top Energy, which is owned by its power consumers, has increased its charges for street lighting by 26 per cent - a cost that will be passed on to ratepayers by way of proposed Uniform Annual Charge of $360 a year. Price hikes like these demonstrate why families are struggling to cope.

Mana Party leader Hone Harawira - who wants to check the price hikes are justified - says some families have been hit so hard that they are switching to candles for lighting and the elderly are switching off their hot water.

Top Energy says the increase in line charges - the highest in the country - arose because the company had taken over some of the Far North assets of national grid operator Transpower.

The move, it reassures us, will result in long term savings of $10 million. It will also mean that line charges for Far North consumers would be limited to single figures while elsewhere consumers would continue to pay double digit increase to fund a major national grid upgrade. Short term pain for long term gain, in other words. This will be cold comfort for families now struggling to pay their power bills.

The company points out that the cost of buying the assets had to come from somewhere.

Fair enough, but it appears those least able to afford it, (families in a region known for high unemployment and high levels of deprivation) are bearing the heaviest burden.