The Electricity Authority (EA) is consulting on changes to the way electricity transmission is charged by Transpower. These changes could mean significant increases to the electricity bills of people in the Far North.
The proposed increases are from $4.76m/yr currently, to $12.95m/yr, $12.85m/yr or $12.77m/yr depending on the option. The EA says this will increase the transmission component of Far North customer bills by as much as $266 a year, or 172 percent.
One of the alternatives on offer would be to increase transmission prices on future infrastructure investments only. This would keep pricing at the status quo and would be Top Energy’s preferred option. However in their consultation document the EA says that this option is “the outer bound of the continuum of transition options”. In other words – their least preferred option.
Having reviewed the various options proposed by EA, and now having met with the Authority, Top Energy remains extremely concerned. The company feels that the Far North could be given an extremely raw deal. The increases under consideration call for its customers to subsidise the investment that has gone into keeping the lights on in Auckland by boosting and upgrading that city’s transmission infrastructure.
The EA is striving for a fair transmission pricing regime. Top Energy does not believe that changing the rules retrospectively is fair and has said consistently that any new pricing regime should apply to future investments only.
With planned growth of local generation at Ngawha it would be cheaper for Top Energy to by-pass the current Transpower transmission system and feed its power directly down to Northpower’s customers.
“We fear that if these increases are introduced, many in our communities will be tipped into fuel poverty. And it’s a huge step back for the efforts to encourage commercial investment in our region. Our communities need economic stimuli, not greater operating costs for business,” said Top Energy chief executive Russell Shaw.
“For years we have been upgrading our network at a prudent and sustainable pace. This has included buying the transmission assets at Kaikohe and Pamapuria and the line that connects them. We have already made investments to replace these aged assets that were long overdue. But we have done this while capping our price increases to amounts that we felt our customers could afford – levels that were significantly below what we were allowed to charge by our regulator.
“We have taken responsible decisions reflecting the priorities of our communities and adopted innovative solutions to deal with supply issues instead of throwing money at them.”
If these options are adopted by the EA they will undo this prudent approach and hit Top Energy’s customers with a massive financial penalty reflecting the investment that has gone predominantly into somebody else’s electricity infrastructure, Mr Shaw said.
Top Energy will be submitting in the strongest terms as part of the EA’s consultation process and is calling on its customers to do the same.
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