Electricity lines charge increases will hurt rural customers

Rural Women

5 September 2012

Media release

For immediate release

Electricity lines charge increases would hurt rural customers says Rural Women NZ

The possibility of further increases in electricity line charges, as signalled in a recent Commerce Commission report, would have a negative impact on rural families and small businesses, says Rural Women New Zealand.

RWNZ spokesperson, Pam Thomlinson, says, “Proposals in the report will allow electricity lines companies that supply some of New Zealand's most remote rural areas to raise their charges by as much as 15 percent next year, with further rises down the track.”

Any increases would have an even greater impact in rural areas.

“Rural householders are disadvantaged because of where they live and work,” says Mrs Thomlinson. “Per capita, they have lower incomes than urban householders and NIWA data shows inland areas, where many rural people live, experience colder winters, so that more heating is needed.”

Rural Women New Zealand says consumers need to be watchful for any announcement that their lines company intends to consult on its price path, as this could signal they wish to raise prices above what the Commerce Commission determined.

“Lines companies are allowed to request that the Commission sets a "customised price path" if they think they should be allowed to raise prices even higher. But they are required to consult their customers first,” explains Mrs Thomlinson.

“It is also important to ask companies about any plans they may have for removing power lines they consider ‘uneconomic’, which may also leader to higher priced alternatives.”

Under the Electricity Industry Act 2010 companies can remove ‘uneconomic’ power lines, so long as they provide alternative generation such as solar, hydro or wind with generator or battery backup.

Rural Women New Zealand urges rural customers to join in the consultation and is calling for ways to reduce spending, so that prices are reduced rather than increased.

The Commission released its draft decision on Electricity Lines Charges late last month with feedback due by 1 October 2012.

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