Steep rise in gas bills penalises low users

Gas users have been hit by a 75 percent increase in fixed daily charges for gas supply by Contact Energy.

The increase takes the 38 cent daily charge to 66c. The rise means gas users in Wellington pay almost $20 a month fixed charge even if they do not use any gas.

For an average user of gas - 540 kilowatts a month - the rise brings a 10.6 percent increase in the total gas bill.

A spokesman for Energy Minister Pete Hodgson said the Government's agenda had "always been first to get electricity issues sorted out" through an inquiry and a Government response to the inquiry and then it would look and see if there were any parallels in the gas sector.

The electricity inquiry's report due out on Monday would be the first piece of substantial policy advice around such issues as fixed charges for energy.

All the effort that had gone into electricity issues might illuminate problems in the gas sector as well, the spokesman said.

Consumers' Institute chief executive David Russell described the price rise as "a commercially crazy move" and the best way for Contact to lose customers.

It flew in the face of all calls in the past year for lower fixed daily energy charges, Mr Russell said.

"It's a very rude shock to low users of gas. Their standing charges have zoomed up," he said.

The institute had received several letters and calls of outrage from gas users after Contact raised the daily fixed charge to 66 cents on May 1. Daily fixed charges for Contact customers also rose in Auckland, Hawke's Bay, Manawatu and Horowhenua.

Mr Russell said households with only a gas heater would be better to cut off the gas and buy an electric heater. Sixty-six cents a day would buy a couple of hours of electric heating.

Contact has lowered the price of energy to 4.1c a kilowatt from 4.9 cents to partly offset the big increase in fixed charges.

But Contact communications director Bruce Thompson acknowledged low users would be hit because the drop in energy charges was not as much as the rise in fixed charges.

Asked why not just raise the energy charge, Mr Thompson said that would penalise big users.

Included in the new charges was the cost to rent the pipes, owned by United Networks, payment for transmission of the gas to Wellington, and the costs of billing, metering and running call centres, Mr Thompson said.

TransAlta is an alternative supplier of gas in Wellington. However, spokesman Mervyn English said yesterday the company had not been pushing that much.

- NZPA