Right direction taken - Flick

Exposing consumers to the true cost of electricity was likely to change their usage behaviour, Flick Electric chief executive Steve O'Connor said.

Responding to questions from the Otago Daily Times, Mr O'Connor welcomed the Electricity Authority's planned changes to transmission charges.

Acknowledging some areas would be disadvantaged by higher costs, Mr O'Connor said the costs associated with access to the national grid, managed by Transpower, made up about 10% of the average household power bill.

Under the current methodology, South Island generators had been paying a "relatively higher cost'' of transmission pricing.

"The authority's announcement has signalled a more transparent and fairer overall allocation of electricity transmission costs.''

Under the authority's preferred option, lines companies in the South Island would probably see a reduction in the transmission charges from Transpower from 2019, he said.

Flick provided pricing information to customers every 30min, enabling them to decide whether to use power at a higher price or wait until the price dropped.

In line with its pass-through model, Flick would immediately reflect any change in South Island network companies' pricing in customer bills, Mr O'Connor said.

Companies were trying to take peak loads out of the day so they did not need to build more generation. The authority's proposal was more cost-reflective of getting energy to the regions. Rather than a single flat price, it had created prices by region.

From Flick's point of view, the decision was good, as it showed customers power was not a finite resource, signalling they had to make the choice, he said.

"We believe the authority has moved in the right direction. The authority's preferred approach will really shine the spotlight on where and how we need to invest in technology to ensure a secure and low-cost energy future.''

Flick operated in Christchurch and Dunedin, and most North Island cities.

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