Surge in Auckland power prices likely
A major overhaul of electricity pricing could see Auckland households’ power bills hiked even more than previously expected.
On May 17 the Electricity Authority announced proposed changes to make the pricing of the national grid fairer.
A number of regions would pay less for power, while Auckland and Northlanders who had benefited from major infrastructure investment would pay more.
Auckland customers collectively face an extra $78 million worth of charges under the proposed new pricing.
The EA calculated that the impact on an average residential customer in Auckland would be about $58 to $66 a year.
However, Auckland electricity distributor Vector is questioning the EA’s numbers, saying its own estimate was the cost would be significantly higher at $97 a year.
Vector said businesses would face a $148 increase, schools would face increases of around $1577, and large users would pay up to $22,000 more.
The EA has been approached for comment.
Access to the grid, provided by state-owned monopoly Transpower, makes up about 10 per cent of the average household power bill.
Under the EA’s preferred option, 14 regions would pay more than they do currently, while 15 would pay less.
The overall impact on residential prices would be an increase of 0.5 per cent, or $11 per household per year.
The EA said that over time, the proposal would reduce costs for the industry and prices for consumers.
That was because it created a strong incentive for much more efficient investment, rather than the wasteful activity that occurred under the current regime.
Auckland electricity distributor Vector is questioning the EA’s numbers.
Vector estimates Aucklanders will pay an extra $97 a year under the proposal.