Line charge increases

28 February 2005

Line charge increases

Line charge increase for Energy Retailers operating in Northpower’s network Effective 1st April 2005

Line charges for Energy Retailers operating in Northpower’s network will increase from 1 April 2005.

Northpower has increased its overall line charges by 2.2%. The impact of the changes on electricity prices is unpredictable because Retailers do not have to directly pass through line charges. However, if the new charges were passed through at cost, an average domestic customer would see a $1 increase in their monthly electricity bill.

Northpower’s line charges are regulated by the Government Price Threshold Regime. Northpower is one of three line companies in New Zealand that have been allowed to increase prices by 1% more than inflation. This is due to Northpower's low relative line prices and an efficient operation.

Northpower Chief Executive, Mark Gatland, said that Northpower has an outstanding track record and many millions of dollars are returned to customers through line charge holidays. However, the company also needs to ensure prices and returns do not fall below accepted commercial rates. Unfortunately the increased regulation of the industry is adding significant complexity and cost to Northpower’s lines business.

ENDS

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