Green law pushes up power price

The ETS aims to push people towards more greenhouse-efficient electricity. Photo / Simon Baker

Two big power suppliers have blamed the Emissions Trading Scheme for price rises which will add an average $5 a month to electricity bills.

But competitors have accused them of rushing to lift prices without knowing how much the scheme will cost.

State-owned Mercury Energy and Contact Energy will increase their prices by 3.3 per cent and 3.2 per cent respectively from July 1, when the ETS introduces a price on greenhouse gas emissions.

Gas prices will rise 2.4 and 2.2 per cent respectively on the same day.

Other big retailers Genesis Energy and Meridian Energy are adopting a "wait and see" approach.

"It is going to be a huge cost on our business," said a spokesman for Genesis, the most emissions-heavy of the big power generators. "But we are not rushing to put up our prices straight away as others have done."

The ETS aims to push people towards more greenhouse-efficient electricity, transport and other options by making it more expensive to emit greenhouse gases.

Of the five main electricity companies, Genesis stands to lose the most because it operates the coal and gas-fired Huntly power station, which accounts for 5 per cent of New Zealand's greenhouse emissions.

Trustpower and Meridian generate their electricity from renewable sources, including wind and hydro.

Meridian spokeswoman Claire Shaw said the ETS would impose a cost but it was difficult to predict how much it would be, and the company would not be making a one-off price rise because of it.

Genesis spokesman Richard Gordon said the compliance date for paying for excess carbon emissions was not until next April.

"We have got time to assess the impact on the business."

Mercury representative Marie Hosking said the price rise was based on the company's "best estimate" of what the ETS would cost.