Power Prices Cover-up?

power lines‘No more bulldust’ on charges! says Electra

By Alan Tristram

The Kapiti power lines company Electra has renewed its call for power retailers to be more transparent about their charges.

Electra and other lines companies have been campaigning for some time for power bills to disclose where all the costs come from.

The Electra chairman, Chris Turver, of Te Horo, says power charges are back in the limelight as Electra — one of New Zealand’s smaller lines companies — takes on one of the largest sharemarket giants over who is gouging consumers.

He says Infratil, which has large investments in the retail and generation market, has claimed (Infratil September Update) that since 1990 ‘it is clear the largest cost has been from lines charges.’

Mr Turver says: “The Electra Trust, owners on behalf of its 42,800 consumers of the Electra lines distribution network in Kapiti and Horowhenua, has had enough of blatant misinformation from the big retailers and produced real facts.

“Electra’s distribution costs have increased since 1990 by (only) 8.6 percent over the rate of inflation and the Trust has challenged each of the big retailers to produce their increases over the same 13 year period.”

Mr Turver says a breakdown of a typical power bill in Kapiti-Horowhenua shows that eight percent of the cost comes from getting power from the national grid, 21 percent is Electra’s net cost of distributing that power over 1,700 kilometres of mixed urban/rural land — and the other 71 percent is charged by the big retailers.

Despite lobbying by the lines companies, he says, power bills do not disclose these three critical pricing factors because the retailers, who produce the consumer bills, have consistently refused to co-operate.

Mr Turver says the extensive misinformation in Infratil’s article has brought into the open a crusade by the big retailers to try to blame lines companies for power price increases.

The evidence shows that lines companies, which are highly regulated, have been forced over the years to comply with information disclosure requirements which would make it impossible to over-price distribution costs.

“By contrast, there is nothing like the same regulatory regime over the big retailers and their costs are out of control as Electra’s evidence has shown.”

Support for the lines companies positions has come from the Electricity Networks Association, representing lines companies, and Energy Trusts of New Zealand, representing the Trusts.

Mr Turver says the only way for consumers to get the real facts is for power bills to transparently set out the three key constituent parts of power supply – national grid supply, local distribution, and retail costs