'Time to speak out' on power charges

Otago residents should make their views on power prices heard in an effort to reduce skyrocketing electricity bills, Central Otago Mayor Malcolm Macpherson says.

He is urging people to make submissions on a ministerial review of the electricity sector, which was made public yesterday.

The review said that retail electricity prices were excessive and recommended changes in regulatory control, allowing line companies to retail electricity.

It also recommended encouraging consumers to switch retailers for better deals, and transferring assets between State-owned Enterprises.

The ministerial review was commissioned by the Government over concerns about rising prices to consumers.

"This is the ideal time for a large number of residents to be sending a strongly-worded message to Wellington about what they think of power prices," Dr Macpherson said.

In the past week, Central Otago residents have spoken out about the cost of power as some struggle to pay monthly bills exceeding $1000.

Dr Macpherson said it was good to have an independent review panel acknowledge power prices had "gone up too far too fast", and although the review may not solve problems in the sector, it was "better than nothing".

"I suspect it is not adventurous enough to make a really worthwhile difference, but it is a step in the right direction. I will be making a submission and hopefully others will too."

Dr Macpherson said the review made a "half-hearted" attempt at fixing the current sector situation established with market reforms in the 1990s.

He said linking lines companies to retail competition could provide some better deals for power consumers.

"A lot of people in Central Otago are saying, `If only we could go back to those days when we had access to cheap power being generated here', but I think the chances of that happening are a bit slim.

"It's impossible to unscramble the omelette that was established with the reforms," the Central Otago mayor said yesterday.

Energy Minister Gerry Brownlee said many of the recommendations were "appealing", and power conservation campaigns could be used as a last resort.

Mr Brownlee said retail electricity prices had risen 72% in the past eight years and needed to be flattened because there were price drivers such as climate change looming in the future.

The Government had been very careful not to "make bold claims" about what the future price may be, but was not prepared to sit back and do nothing, he said.

Submissions on the review will be accepted during the next five weeks.

Electricity review

• Three options for restructuring SOE assets.

• Whirinaki power station reassigned or sold.

• SOE's required to disclose risk positions.

• Retailers required to pay consumers for conservation campaigns.

• Floor price on spot prices during conservation campaigns.

• Electricity Commission replaced by Electricity Market Authority.

• Focus on efficiency and reliability in electricity market.

• Review Energy Efficiency and Conservation Authority.

• Commerce Commission authorise major grid upgrades.

 

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