Pain easing for electricity users

By AINSLEY THOMSON

Electricity users are being promised relief after some have seen a 42 per cent increase in their power bills over the past three years.

A Consumers' Institute survey shows that between October 2001 and last month, power bills rose 29 per cent in Dunedin, 42 per cent in Christchurch, 27 per cent in Wellington and 12 per cent in Auckland.

Meridian Energy spokesman Alan Seay said the increases were the result of supply and demand.

"We have seen electricity demand increasing at least 150MW every year, which is equivalent to a city the size of Hamilton or Dunedin.

"Our estimate is that it is actually increasing more than that because of the strong economic growth."

Mr Seay said there had been little investment in new generation of electricity, but prices had reached the point where investment had become attractive.

"Our view is that the worst of the pain is over.

"We have seen two years of very steep price rises for the domestic consumers, and business consumers have been living with it for quite a while longer," he said.

"We are starting to see that investment take place."

Meridian had developed 250MW of new generation in the past few years, the most recent being the July opening of the country's biggest windfarm at Te Apiti, near Palmerston North, which will produce 90MW of electricity.

Consumers' Institute spokesman David Russell said the institute would watch the prices with considerable interest and hold Meridian to its word.

Three of the five main companies - Genesis Energy (Wellington's main retailer), Meridian (Christchurch's main retailer) and Mercury Energy (Auckland retail arm of Mighty River Power) - are state-owned. The other two - Contact Energy and TrustPower - are private companies.

National energy spokesman Roger Sowry said householders were paying for Labour's inaction on new power generation.

"The Government's been all talk and no action on the key impediment to improving the security of our electricity network and ensuring new generation - the reform of the Resource Management Act."

Energy Minister Pete Hodgson would not comment until he had received figures from the Treasury and Economic Development Ministry.