Heat on elec­tric­ity spot price

The Dominion Post - - Business - CHLOE WIN­TER

Thou­sands of New Zealand house­holds are ex­pe­ri­enc­ing sharp in­creases in power bills this sum­mer due to low hy­dro lakes, a lack of wind, and the shut­down of a ma­jor power plant.

Welling­ton power re­tailer Flick Elec­tric, which sells power at a price linked to whole­sale prices, told cus­tomers in an email the cost of power had been ‘‘higher than nor­mal’’ in re­cent weeks.

The news has left some cus­tomers frus­trated fol­low­ing a dry win­ter that also sent prices soar­ing.

At the time, Flick Elec­tric chief ex­ec­u­tive Steve O’Con­nor said higher prices lasted be­tween three and eight weeks, and whole­sale price surges hap­pened only once ev­ery five years.

This time around, cus­tomers have seen in­creases since late Novem­ber, with prices ex­pected to set­tle just be­fore Christ­mas on De­cem­ber 22 once a Taranaki power plant was back on­line.

The email also said an­nual main­te­nance on the Taranaki Com­bined Cy­cle, a gas plant run by Con­tact En­ergy, had taken a ‘‘big chunk’’ of gas gen­er­a­tion out of the mar­ket.

‘‘Be­cause of this tem­po­rary short­age, the value of power has in­creased … We know these cur­rent prices are a bit of a down buzz.’’

Some cus­tomers have ex­pressed their frus­tra­tion on Face­book, with one say­ing the price hike was ‘‘hurt­ing’’.

An­other said he had no­ticed ‘‘pretty high spot prices’’ over the past fort­night. ‘‘Pay­ing more than 20 cents [per unit] in sum­mer isn’t a goer re­ally.’’

An­other said off-peak pric­ing was 37 cents per unit higher than win­ter prices.

In re­sponse to some of the posts, Flick Elec­tric com­mented: ‘‘Once the main­te­nance and con­di­tions re­turn to norm, spot prices should set­tle.’’

"Pay­ing more than 20 cents [per unit] in sum­mer isn't a goer re­ally." On­line com­menter

O’Con­nor said cus­tomer us­age was typ­i­cally low at this time of year, so the bill im­pact was ‘‘very, very minor’’.

Cus­tomer had just been through two months of low spot pric­ing, and the surge would only be short-lived, he said.

In ad­di­tion to the sched­uled main­te­nance to the gas plant, there has been less wind gen­er­a­tion dur­ing spring, O’Con­nor said. ‘‘They usu­ally do [main­te­nance] at this time of year be­cause spring is typ­i­cally very windy in Welling­ton and it’s not at the moment.’’

The email read: ‘‘Welling­ton has been weirdly still and sunny, and there’s less snow than nor­mal melt­ing into the South Is­land hy­dro lakes.’’

So what does this mean for sum­mer pric­ing? ‘‘Al­though the wind tur­bines are stiller and hy­dro lakes are lower than usual, there’s less de­mand for power over the warmer months, which will help keep a cap on your bills,’’ the email said.

Flick Elec­tric founder Steve O’Con­nor says there will be a ‘‘very, very minor’’ change in cus­tomers’ bills.

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