Community fights 20% power hike

A West Coast community is heading to court to fight an increase in grid charges that will hike its power bills by more than 20%.

Community-owned Buller Electricity (BEL) announced yesterday it was taking the Electricity Authority and Transpower – both owned by the Government – to the High Court to seek a judicial review over a 427% increase in transmission charges.

BEL director Shannon Hollis said such a steep increase was unreasonable and ‘‘particularly harsh’’ on its small district. Legal action was its only option, she said. ‘‘It’s a real David and Goliath situation’’.

The increase was a result of Transpower reclassifying BEL’s assets. Hollis said the rules by which the grid operator did so were discretionary, meaning it could have chosen not to. BEL disputes the legality of the move.

Hollis said BEL could only absorb a small percentage of the increase without affecting its financial sustainability.

The rest would be covered by consumers, resulting in a 20.2% average rise in electricity bills for households and 23.9% for businesses. This could lead to ‘‘seriously adverse economic consequences for the region’’, Hollis said.

BEL’s consumer base was 4850 people. Jan Coll, who chairs the trust which owns BEL, said those people were already struggling economically.

The community had been ‘‘hit hard in recent times,’’ Coll said, such as by flooding in Westport. ‘‘[It] has relied on emergency Government funding to help it through.’’

A Transpower spokesperson said the grid operator stood by its decision.

‘‘We welcomed independent expert review of our decision, but Buller have decided to seek judicial review instead and we respect its right to do so.’’

In a September report on the change, Transpower said it considered the impact on consumers.

However, the company said its role was to efficiently allocate transmission charges, ‘‘not to seek to address socio-economic issues more broadly than that’’.

It said without this reclassification, non-BEL users would subsidise the costs.

In December, Rebecca Osborne, Transpower’s head of grid pricing, said there would be no increase to transmission revenue as a result of the changes.

Transpower said its role was to efficiently allocate transmission charges, ‘‘not to seek to address socio-economic issues’’