Power pricing review misses the point

New proposals from the Electricity Authority could force some households to pay hundreds of dollars a year more for power to subsidise big business users, making it even harder for families to warm their homes in the winter, the Green Party said today.

The Electricity Authority’s (EA) reviews of transmission pricing principles and distributed generation pricing principles were released today. People in 14 regions are likely to get bigger power bills, while bills could be lower for people in 15 regions. Major industrial users would have more scope to apply for special discounts. The EA has also proposed changes to payments for small-scale distributed electricity generation, such as local windfarms, small hydro dams, and solar generation.

“The fact is, higher power prices make for colder families and sicker children in winter,” Green Party energy spokesperson Gareth Hughes said.

“The Electricity Authority should be treating the electricity network as a national asset for the benefit of all New Zealanders, not playing people who live in different regions off against each other while cutting the Tiwai Point aluminium smelter’s power bill by $20 million.

“Allowing major industrial users more scope to ask for special discounts, which households will have to subsidise, is blatantly pitting the interests of big businesses against families having warm homes in the winter.

“Parts of the Electricity Authority’s document read like people will just up and move their lives around the country to maximise economic efficiency in the power grid, which is ridiculous.

“Around the world the trend is towards more local, distributed electricity generation, but the Electricity Authority seems to be trying to get New Zealand to go the other way by slashing the incentives to produce power locally.

“Discouraging local distributed generation is likely to actually increase transmission costs in the long term, because we’ll have to keep paying to upgrade the lines to carry power in from far away.

“It’s also very concerning that Kiwirail’s annual power transmission bill could jump from half a million dollars to $2.3 million, at a time when we should be helping Kiwirail to move more freight off the roads and onto rail, not load it up with more costs.

“Greater ‘time of use’ pricing, rather than regional pricing, could send better incentives to reduce peak demand and keep investment costs down,” said Mr Hughes.

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