Seniors group says lower power charges a political move

1.00pm

Imposing a fixed daily charge for households which use less than the average 8000kwh of power a year is simply a political move in reaction to announced price hikes for electricity users, Grey Power says.

Yesterday Energy Minister Pete Hodgson said from October 1, the Government would regulate power retailers to make sure they offered a fixed daily charge of 30 cents, excluding GST, to small consumers.

The tariff had previously been a guideline not taken up by all retailers, which Mr Hodgson said penalised small users of power, such as elderly people.

But Grey Power chairman Graham Stairmand told NZPA today the organisation, which represents 78,000 members, was unimpressed with the move.

"It's not a new initiative, because it's been in place some three years to my knowledge.

"I believe it's just a political response to the fact that there is going to be a reasonably large price increase by all retailers by about September this year."

Earlier this week state-owned power company Meridian announced price increases of between 10 and 23 per cent for some customers.

Mr Stairmand said Grey Power had been lobbying the minister to regulate the whole power industry, not just retailers, and set up a consumers' advisory group to have input into price changes.

The fact electricity generation companies were state-owned and paid the Government dividends meant it was not in the Government's interests to keep power prices down, he said.

Grey Power members were largely superannuitants with no discretionary income, and would have to bear increased electricity costs by spending less on essential items, like food and clothes.

But the Consumers' Institute said the low fixed daily charge was not a "cynical" move, but "almost inevitable".

Chief executive David Russell told NZPA today the compulsory tariff had been flagged to retailers for a long time and it was no surprise the industry did not like it.

"The companies have been asked to sort things out for themselves... and they baulk, they resist, and eventually of course the Government is then forced to step in.

"If the industry had shown a little more maturity and accepted what the Government was asking it to do, then they would not have suffered the imposition of regulation."

He said the tariff was the best consumers could expect "at the moment" but power price increases were going to badly hit poor New Zealand families, and large households.

"Of course the further south you go, the worse it's going to become."

- NZPA