Lower charges for using less electricity

By KEVIN TAYLOR

The Government will intervene to set some power prices so low-use consumers can get a special tariff from any retailer - but it's also planning to boost the levy paid by consumers for regulation of the industry.

Energy Minister Pete Hodgson made both announcements yesterday.

The levy - signalled last year when the Electricity Commission was announced - will average $18.20 per household per year and is likely to be charged straight to consumers by the power companies.

A spokesman for Mr Hodgson said consumers already paid an estimated $9.45 last year under regulatory arrangements.

The extra $8.75 would pay for extra commission responsibilities such as buying reserve generation.

Mr Hodgson said compelling all power retailers to offer a low-use tariff followed calls for intervention from the Consumers Institute and other bodies monitoring rising power prices.

He said he was concerned about the impact of rising power prices on low-income groups and had decided to make the tariff compulsory from October 1.

"Some companies had been playing games around offering such an option," he said in a statement.

A spokesman for Mr Hodgson said about 500,000 households - about a third of all households - would benefit if they opted for the tariff.

That is the number of households considered low-use - that consume an average of 8000kwh of power a year or less.

However, the Government does not know how many consumers are currently on low-use tariffs because power companies refuse to tell officials.

The regulation will compel retailers to offer a tariff with a fixed charge which cannot exceed 30c a day excluding GST.

The change also requires companies to give equal weight in tariff advertising to the low-use option.

Mr Hodgson said it was particularly designed to help older people on fixed incomes, who were typically frugal users.

A spokesman said the main five retailers - Genesis, Trustpower, Contact, Meridian, and Mighty River Power - all offered a low-use tariff now but only Meridian and Contact were considered to fully comply with current Government policy.

Progressive MP Matt Robson welcomed the tariff, saying it was "great news" for superannuitants and low- income families.

Consumers Institute chief executive David Russell said the regulation would not affect large, poor families because they used too much power.

"It's not going to help those with big families on low incomes ... who are going to be using more than 8000kwh per year."

Mr Russell said consumers would still have to apply to their power company for the tariff to get it.

A spokesman for state-owned Meridian said it already offered the low fixed-charge tariff option and so the change would have little effect.

Contact, which is listed on the stock exchange, said it also offered a low-use tariff and considered it complied with Government policy.

But David Hunt, Contact's general manager of corporate development, said it was disappointed Mr Hodgson had seen fit to regulate power prices.