Scrapping WEL discount a ‘betrayal’

WEL Energy Trust is betraying the community by dropping a longstanding power discount, a former chairman says.

Russ Rimmington, who served on the trust’s board from 1996 to

2002, said scrapping the discount for a ‘‘harebrained’’ technology project went against WEL Energy Trust’s purpose.

WEL Networks, owned by the trust, intends to cut a $14 million discount to Waikato residents in

2019 – increasing power bills by $7 a month.

However, WEL Networks will drop line prices by $7 million a year in 2018.

The trust will invest the remaining $7 million into projects promised to disrupt the regional power market.

‘‘It’s just going into a black hole – it’s all bulls...,’’ Rimmington said.

The trust announced on Tuesday that removing the discount was part of a greater plan to reduce prices.

It’s exploring solar, battery storage, power sharing and is working with OurPower, a commercial project in the electricity retail market.

Rimmington, a former Hamilton mayor, said the overall increase of $84 a year for residential customers may appear negligible to many, but it was a lot for a pensioner on low income.

This was particularly concerning, Rimmington said, as pensioners were among those who sold shares back to the company in the past.

‘‘The public which sold the shares to the trust didn’t do it for some harebrained technology scheme.’’

It was a change in direction that wasn’t signposted by trustees during their election, he said.

The trust should remain focused on community projects such as those part-funded during his time, including the FMG Stadium Waikato, the performing arts centre at the University of Waikato and Innovation Park.

WEL Energy Trust chairman Mark Ingle said the criticism was misplaced, as the trust’s strategic goal was unchanged.

‘‘What we’re asking the company to achieve is overall benefits that was greater than the discount today.

‘‘The company is working to find new initiatives to reduce prices.’’

He said the additional $7m in dividends the trust will receive will be used to benefit not only WEL’s lines customers, but the greater community.

‘‘Within our trust deed, and Russ would be aware of this, the number one objective for the trust is that the business operates successfully.

‘‘WEL operates in a regulated environment, where decisions about growing the return on investment is limited to around 7 per cent, and we’re at 6.5 per cent – so it’s not about profiteering.’’

The $7 million reduction in lines cost was a genuine reduction for the customer, Ingle said.

Although it could not be guaranteed that an electricity retailer would pass this reduction on.

‘‘The retailers package this up and it’s beyond our control, because the retailers all have different charging models.’’

Ingle encouraged customers to monitor their bill, and ‘‘vote with their feet’’ if the price reduction wasn’t received.

WEL Networks estimates line pricing makes up approximately 25 per cent of an electricity bill.

WEL began providing a yearly discount for growing efficiencies in its network to residential customers in 2003.

The discount is marked as credit on a consumer’s account by the electricity retailer.

‘‘[Rimmington] is making comment on someone else’s system and, the reality is, no-one has put more money into the community than the current trust,’’ Ingle said.

On Tuesday, WEL Networks chairman Rob Campbell said the discount was a blunt instrument to benefit customers, which limited the company’s options.

‘‘We’re developing ways to disrupt the sector so total power prices are reduced.’’