Transpower's price hike lacks credibility

Monday, November 28th, 2005

Transpower's price hike lacks credibility

Only a monopoly would dare announce it was going to raise its charges by 19 per cent as Transpower has, the Employers & Manufacturers Association (Northern) says.

It's especially disappointing coming from a state-owned monopoly, said Alasdair Thompson, EMA's chief executive.

"No business or other power consumer can afford such a massive increase in the one hit," Mr Thompson said.

"As Transpower needs to upgrade its transmission lines capacity and capability we have no doubt it needs extra revenue, but it should borrow and use retained earnings to fund the investment, not dump a 19 per cent hike on its customers.

"Transpower should have been investing steadily in increasing the nations' transmission capacity for years; its been a slumbering giant suddenly waking up to its obligations and expecting consumers to pay to meet them.

"If the Commerce Commission was not already investigating the huge price hike we would certainly be demanding that they do.

"Government should also look at reducing its substantial dividend requirement from Transpower which is paid by electricity consumers to help avoid such highly inflationary price increases."

ENDS

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