Crippling power prices may drive town off the grid

A tiny King Country town which depends on tourism could go off the national grid because of crippling lines charges for power.

In towns all over the region, residents, farmers and business owners are investigating self-sufficient power supply to get away from The Lines Company's "demand charge", which has increased some electricity lines bills by up to 300 per cent.

It comes as the Commerce Commission starts a Fair Trading Act investigation into The Lines Company.

The owners of four lodges in National Park, a village catering to Mt Ruapehu skiers, are meeting experts to determine what other power sources they could use.

Pipers Lodge owner Bruce Lawrence pays $30,000 a year in lines charges - $10,000 more than his power costs.

Mr Lawrence said the group would investigate diesel-fired generators, solar power and wind power, but they were concerned about the cost of converting as well as the burden it would leave on the 200-plus ratepayers of National Park.

"We are looking at doing alternative energy but we're scared if we do that then the town will suffer and we don't want the town to suffer. One option is for the town to completely go self-sufficient."

The Lines Company - the only distributor of electricity to 20,000 homes, farms and businesses from Otorohanga to Ohakune - introduced capacity-based pricing in 2007.

The move aimed to reduce peak loading on the network, but can increase costs for some users.

National Park School principal Terry Hemmingsen said the school could not afford to heat its swimming pool in winter because of high lines charges.

He was investigating installing wind turbines on school land to generate power for the whole community.

Discovery Lodge co-owner Andy Harland said the $42,000 a year he paid in lines charges was "destroying" the business.

He and son Callum spent $55,000 importing and installing a German gas boiler to heat water at the lodge and reduce their electricity use.

Ruapehu Alpine Lifts general manager Dave Mazey said the Whakapapa and Turoa skifield operator had not ruled out switching to diesel generators to avoid the $1.1 million in lines and transmission charges it incurs each year.

But Mr Mazey said going off the grid would be unfair on those who remained connected.

Owhango farmer Richard Steele said his sister was the first of his extended family, who between them had about 12 houses and farm sheds on his land, to go entirely off the grid.

He said the annual lines charges for the properties, which included a tourism venture, were crippling and other family members were preparing to follow suit.

The Herald understands as many as 40 complaints have been lodged with the Electricity and Gas Commissioner.

At a small protest in Taumarunui last month, residents called for a ministerial inquiry.

But Energy Minister Phil Heatley said he did not have legislative or regulatory powers over any lines companies. However, the Commerce Commission is investigating whether there has been any conduct or misrepresentations by The Lines Company in pricing claims, or any practices that might breach the Fair Trading Act.

Although the Electricity Authority has not found any breaches, it is planning its first review of approaches to electricity lines pricing this year, and The Lines Company's pricing methods will be part of it.

Lines Company chief executive John Anderson said he was aware of the Commerce Commission investigation into the company's newsletters.

However, he said, the commission had previously noted the company's charges were lower than was sustainable long-term.

"We're about to go out with consultation to our customers on ways which between our customers and ourselves we can reduce costs rather than necessarily increase prices."

He said the company was trying to avoid pushing prices beyond what people could afford to cater for some loads which could be supplied by alternative energy or reduced by people managing their use better.

It was trialling 250 new meters and in-home displays tracking electricity consumption, and telling residents when the company is load controlling.

The company's relationship and communications manager, Elizabeth Anglesey, said it did not encourage customers to go off the grid because it left a higher cost for those left on it, but partial sustainable energy options were a good idea for businesses that had "rogue peaks".

- Natalie Akoorie, NZ Herald

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