Grey Power cool on loss of low-use power plan

Grey Power president Mac Welch says it is not happy the Government has decided to remove the requirement for electricity companies to sell low fixed charge power plans.

Energy Minister Megan Woods said on Thursday officials would phase out the requirement for the plans over five years.

The plans usually reward households that use less than 8000 kilowatthours of electricity per year, typically smaller households and people who use gas or solar energy.

Electricity Networks Association president Graeme Peters said they amounted to a $170 million crosssubsidy that was often paid by larger families in ‘‘energy hardship’’.

Welch said Grey Power would have a good look at what the Government was saying but he planned to raise the issue with Woods.

The lobby group, which advocates for the over-50s, wanted to see the low fixed charge plans stay, he said.

If the Government was going to remove the requirement for them, ‘‘they have got to adjust the rate accordingly to compensate for it’’.

The change is one of about 20 announced by the Government in its response to the Electricity Price Review on Thursday, which also included new measures designed to strengthen competition in the industry and lower prices overall.

Superannuitants benefited from the introduction of winter energy payments last year. But Welch suggested any argument that justified the change would amount to the Government ‘‘taking with the left hand and giving with the right’’.

About 60 per cent of households are understood to be on low fixed rate plans.

National Party energy spokesman Jonathan Young backed the decision to ‘‘review’’ them but said they should be phased out in a careful way. ‘‘There are people who have large families and poorly insulated homes who have high energy costs so go over 8000kw/h, and then there are people who are able to manage under that quite well because they have good homes and solar panels.

‘‘As technology improves, that becomes a sort of ‘distorted benefit’.

‘‘It is a policy mechanism that has become less and less applicable to the right people.’’

But Young said he did not back the Government’s decision to prevent retailers from offering discounted pricing to people who paid their bills on time.

He believed any overall reductions in prices that resulted from the Government’s reforms were likely to be offset by increases in wholesale electricity prices that he believed retailers had so far been absorbing.

‘‘Nobody is feeding those wholesale increases through into retail household prices because they are concerned about losing customers but people I talk to are saying it is only a matter of time,’’ Young said.