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State-owned electricity supplier Genesis has alarmed the new Government by serving notice of 9 per cent price rises a day after an emergency restraint plea from Reserve Bank Governor Alan Bollard.
The company is sending letters to 76,000 householders throughout Auckland's North Shore and Waitakere sectors, notifying them of average price rises of 8.8 per cent to 9.2 per cent from January 18.
Genesis, which says it has struggled to delay price rises for as long as possible, acknowledges increases to annual power bills will range from $124 for small households using about 5000 units of electricity to $242 for larger families consuming double that amount.
That is despite Dr Bollard's call this week for prices to fall on almost all of life's essential goods including electricity, food and petrol.
Energy Minister Gerry Brownlee has acknowledged strong concern at the behaviour of Genesis, but the Opposition is calling for the Government to become more prescriptive about what it expects of state-owned enterprises in tough economic times.
Henderson householder John Sheppard said he was astounded to receive notification yesterday of the price rise and asked: "What's the point of having a governor of the Reserve Bank if he has no teeth?"
Consumer NZ chief executive Sue Chetwin condemned Genesis for "going against the tide of both what the Reserve Bank has said and what this Government expects", and she urged householders to shop around for cheaper suppliers.
Mr Brownlee, while saying he was unable to direct electricity companies on operational matters, revealed that he called Genesis representatives into his Beehive office during the week "to get an explanation for their power prices".
He said the company's response confirmed to him the extent of difficulties faced from constraints on the electricity network and an excess of demand over supply, leading to price pressures being heaped on consumers.
"I think we are in a dreadful situation where there are a number of factors converging upon us," he told the Weekend Herald.
"What I can say is that I am extremely disappointed that when you have tight times and have the Reserve Bank putting up the warnings you saw this week, that these guys choose for one reason or other to exempt themselves from any of the scrutiny that the Reserve Bank Governor called for."
Mr Brownlee said he was keen on receiving long-awaited reports from the Commerce Commission and Electricity Commission on the electricity market.
"We've made it very clear that if there are some reasonable suggestions about how we might improve things for consumers, then we'd want to take action on these."
He said the fragmentation of the electricity industry under National was 10 years ago, "another government" had been in power for most of that time, "and all we've seen is massive upward price pressure and an energy strategy that frankly left the country well short of what its requirements are".
But previous Energy Minister David Parker said it was quite wrong to suggest Labour had done nothing as it had introduced a regulated price path for monopoly power lines companies.
He said the Government should act immediately to instruct the electricity companies to curb their profits, which include healthy dividends to shareholding ministers.
Genesis spokesman Richard Gordon said his company had delayed passing on increases to it from lines companies, even as its competitors had raised their prices during the year, and it would lose money on its North Shore and Waitakere accounts if it held off any longer.
"And we haven't passed through the full amount, so have had to reduce our profit margin in the Waitemata area."
