NZ Power price 'over the top'

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SUNDAY, 31 DECEMBER 2000

Power price 'over the top' 29 DECEMBER 2000

Power users in Dannevirke will face a 50 percent increase in lines charges, and Tararua Mayor Maureen Reynolds is horrified. Electricity users in Central Hawke's Bay, Wairoa and Gisborne will also be affected by the increase proposed by national lines company Transpower, because they are at the end of the line.

The new pricing structure will hit electricity consumers in Dannevirke and Central Hawke's Bay from Apri1, 2002.

Mrs Reynolds said at least people had some time to plan for the increase. "What a shame. Things are starting to come right and then something like this happens."

She said such a large increase was "completely over the top" and questioned the reason for it. "It's going to have a huge effect on everybody. Elderly people will find it difficult. Some of them are only just getting by on what they get now."

People connected to the Scanpower network in Dannevirke are likely to be hit hardest, while Centralines' Central Hawke's Bay customers face a 17 percent increase. For Gisborne and Wairoa consumers the Transpower component of their electricity bills will rise by up to 39 percent.

The increase will also affect business.

Chief operations manager for Richmond freezing works' Oringi plant, Rowan Ogg, said such a large increase was unacceptable. "We have not been formally notified yet, but there doesn't seem to be any reason for doing it when other lines companies are giving quite large rebates."

The Dannevirke plant employs 600 people and spends about $1 million a year on power.

Feltex Carpets manufacturing general manager Ian Barbour said any increase in costs for its plants in remote areas like Dannevirke would have an adverse impact. "It's costly enough operating in remote locations. All these things add up over time."

Mr Barbour said the Dannevirke plant had a high energy use. It operates 24 hours day and employs about 160 people.

Gisborne and Wairoa consumers will be the first to feel the effect of Transpower's new user-pays pricing policy when it comes off its existing contract on April 1.

The new pricing penalises Transpower customers connected to spur lines, which go off the main lines. The southern Hawke's Bay area was served by a spur high tension line from Bunnythorpe.

Scanpower chief executive Jeff Farnworth said Transpower had indicated it would lift its line charges by 50 percent when Scanpower's contract expired on April 1, 2002.

He said his company was not happy about the proposed increase, but it was only indicative at this stage.

"At this point in time we're not jumping up and down, we're still in contract for almost 14 months."

Scanpower would be negotiating with Transpower.

Eastland Network chief executive Ken Mitchell said Transpower's new pricing model would add 8 percent to the average Gisborne and Wairoa consumer's electricity bill if it was passed on.

He said the new charges were totally unjustified and sent the wrong message to consumers.

"We are being penalised for being connected to a spur line," he said.

He said the new charges were totally unacceptable and Eastland was doing everything it could to have them reviewed.

The new pricing structure was a disaster to regional economies.

http://www.stuff.co.nz/inl/print/0,1103,568737a13,FF.html

-- Martin Thompson (mthom1927@aol.com), December 30, 2000

Answers

SUNDAY, 31 DECEMBER 2000 B U S I N E S S S T O R Y Huge power hike likely for some east coast towns 29 DECEMBER 2000

Thousands of electricity consumers in Dannevirke, Central Hawke's Bay, Wairoa and Gisborne are to be slugged by increases of up to 50 per cent by national lines company Transpower because they are at the end of the line. Gisborne and Wairoa consumers will be the first to feel the effect of Transpower's new user pays pricing policy when it comes off its existing contract on April 1.

The new pricing, which Eastland Network chief executive Ken Mitchell says penalise Transpower customers connected to spur lines, will take effect over two years.

They will hit electricity consumers in Central Hawke's Bay and Dannevirke from Apri1, 2002.

For Gisborne and Wairoa consumers the Transpower component of their electricity bills will rise by up to 39 per cent. Centralines' Central Hawke's Bay customers face a 17 per cent increase while in Dannevirke those connected to the Scanpower network could face rises as high as 50 per cent.

Mr Mitchell said Transpower's new pricing model would add eight per cent to the average Gisborne and Wairoa consumer's electricity bill if it was passed on.

He said the new charges were totally unjustified and were sending the wrong message to people living in the area.

"We are being penalised for being connected to a spur line," he said.

Gisborne and Wairoa draw their power supply from the Lake Waikaremoana hydro scheme.

"Gisborne is 90km away from Lake Waikaremoana and we are being told to pay $6.5 million annually in transmission costs on a lines asset valued at $30 million."

He said the new charges were totally unacceptable and Eastland was doing everything it could to have them reviewed.

The new pricing structure was a disaster to regional economies.

Mr Mitchell asked how Gisborne industries could compete against Hawke's Bay. Gisborne gets a large power price increase while Hawke's Bay gets a reduction. It was so unfair.

"It makes you think that everyone should move to Auckland, Wellington and Christchurch," he said.

Scanpower chief executive Jeff Farnworth said Transpower had indicated it would be increasing its line charges by 50 per cent when Scanpower's existing contract expired in April 1, 2002.

He said his company was negotiating with Transpower now and hoped to finalise negotiations by July.

The southern Hawke's Bay area was served by a spur high tension line from Bunnythorpe, near Palmerston North.

Gary Sturgess, of Central Lines, said Central Hawke's Bay consumers faced a 17 per cent increase in Transpower charges. Its main connection to the Transport grid was at the Redcliffe substation near Napier though it was also connected to Bunnythorpe.

He was not concerned about the increase at the moment because Centralines had 15 months of its existing contract to run.

Meanwhile, Hawke's Bay Network customers face a reduction in their power bills because Transpower is reducing its line charge to the company by an average of 14 per cent.

Transpower's reduction will save the Hawke's Bay region $2 million, equating to an annual saving of about $32 for the average urban consumer. – NZPA

http://www.stuff.co.nz/inl/index/0,1008,567680a13,FF.html

-- Martin Thompson (mthom1927@aol.com), December 30, 2000.


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