Cold snap brings 16 per cent power rise

By JOHN ROUGHAN in Wellington

Households in Hamilton, Thames Valley and the major urban centres have been hit with power price increases averaging 16 per cent from next month.

The increases, announced yesterday by major retail supplier Natural Gas Corporation, mean consumers are beginning to feel the impact of a five-month drought followed by the cold snap of the past few weeks.

The company supplies the former Waitemata power board area, Thames Valley, Hamilton, Lower Hutt, Wellington and Christchurch, under the brand On Energy.

For Waitemata home customers, the price rise will bring an increase of 11 per cent for small consumers, 14 per cent for medium users and 17 per cent for heavy use. The average residential user can expect an increase of 50c a day.

In Hamilton the increase is expected to amount to a 12 per cent rise for small users, 14 per cent for medium consumption and 15 per cent for a the large consumers.

Businesses will face even steeper rises - as high as 19 per cent for heavy power users.

Natural Gas Corporation blamed the increase entirely on "unprecedented high wholesale prices of the past few weeks."

Though the drought and the cold snap have had their effect, the supplier is also known to be unhappy with the pricing tactics of major generating companies selling to the wholesale market.

On Energy has asked the industry Market Surveillance Committee to investigate whether the market is functioning as it should.

Retailers with little generating capacity of their own and many customers have been particularly exposed to the rise in wholesale rates. With wholesale prices at 20c to 25c a kilowatt/hour and retail rates at 5c to 7c, some are thought to have been losing money heavily for several weeks.

Until yesterday, they were holding off increasing their charges for fear of losing customers to the retail arms of major generating companies such as Meridian and Genesis.

On Energy's 2c rise could be the first of many.

Natural Gas Corporation managing director John Barton said the price would be regularly reviewed.

As soon as wholesale prices returned to "normal levels," he said, "we will reduce prices to our consumers."

The rises will take effect from July 1 in Waitemata, Wellington, Thames Valley and Christchurch and from July 16 in Waikato.

The company says its gas prices will not be affected.