Mercury Energy bumps up prices

By MARTIN JOHNSTON

Mercury Energy's residential customers face a 9 per cent price rise.

The electricity and gas retailer says the rise, to take effect from August 18, will add about $8 to monthly "total bills".

But the total bill includes both line company and retail charges; Mercury's residential retail prices are rising by about 18 per cent.

Consumers Institute chief executive David Russell said it was a big increase.

"For a lot of people, $8 a month is going to be quite tough."

Mercury, part of state-owned Mighty River Power, is New Zealand's fourth largest power retailer, with 230,000 residential customers, mostly in Auckland.

Mercury's general manager, John Foote, said past and predicted increases in wholesale prices - caused by the narrowing gap between electricity supply and demand - could no longer be carried and had to be passed on to customers.

New Zealand has just emerged from a four-month power crisis caused by low water levels in the southern hydro lakes and a lack of Maui gas.

The Winter Power Taskforce, set up in March to encourage people to save power, was disbanded 10 days ago because of increased rainfall and improved thermal fuel stocks.

Mr Foote said "we expect the current indications of higher prices will continue" because of uncertainties over water and fuel supplies, the lack of significant additions to the country's generating capacity and the certainty that any new facilities would produce more-costly electricity.

"The entire country has had a price rise now of anything up to 22 per cent [on total bills] ... Nine per cent is at the lower end."

Mercury was holding off its increase until mid-August to minimise the impact on winter power bills, which were typically higher.

Its last increase, of 7 per cent (5 per cent for those who paid electronically), was 18 months ago.

Mr Russell said Mercury's increase was justified by the wholesale price rises, although these were now falling because the hydro lakes were full.

The institute's website offers a free service in which power users can find out which is the cheapest retailer available to them, but Mr Russell said it would be several days before it could be updated with the Mercury increase.