Power pricing: Some bills could rise

The Tiwai aluminium smelter has been thrown a lifeline but there will be winners and losers throughout the country after the Electricity Authority confirmed new rules for paying Transpower’s transmission bill.

The authority estimates some consumers will need to pay up to an extra $41 a year for power, while others would save almost $80 a year as a result of its decision to require electricity users to pay an amount that is closer to the actual cost of their grid supply.

At present, Transpower’s costs, which near $1 billion a year, are built into people’s power bills and are more averaged-out throughout the country.

The biggest losers will be power users served by Network Waitaki, The Lines Company south of Hamilton, Horizon Energy in the Eastern Bay of Plenty and Westpower, all of whom face an annual power bill rise of more than $30 a year.

By far the biggest winners will be consumers served by Electricity Southland who should see their bills come down by almost $80 a year.

However, the changes won’t take effect until 2023.

A clause to protect consumers against ‘‘price shock’’ will ensure no-one’s total electricity bill increases by more than 3.5 per cent as a result of the changes.

A statement released by a group of interested parties including the Employers and Manufacturers Association, Federated Farmers Northland and Auckland, Vector and Trustpower blasted the decision.

The statement said the new rules would ‘‘hurt vulnerable households and businesses’’ and the benefits the authority had identified were ‘‘simply not real’’.

The Electricity Authority has separately approved a new ‘‘prudent discount’’ policy.

That will allow the Tiwai aluminium smelter and potentially other major power users to cap their Transpower bill at the price they might theoretically need to pay to connect their facilities to power stations using their own dedicated power lines.

It is understood the smelter’s majority owner, Rio Tinto, has argued its annual bill from Transpower could fall from $64 million a year to just $28m a year.

Electricity Authority chief executive James Stevenson Wallace acknowledged its decision on how best to pass on national grid maintenance and upgrade costs had dragged on for more than 10 years.

By far the the biggest winners will be consumers served by Electricity Southland.