The cost and delivery of electricity to your home is an election issue worth your interest. The latest round of electricity price “changes” is a good illustration of why.
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In the midst of an oversupply of electricity, reduced demand, and price increases for years going way beyond inflation, on what basis could prices still be rising?
Electricity retailers blamed the increases on higher transmission (Transpower) and distribution (lines companies) costs over which they have no control. They’re right about that.
Those costs are generally set by the Commerce Commission and retailers pass them on to us. But as usual with this industry all is not as it seems. The lines companies say retailers’ new prices are higher than what they are passing on.
We had a look at some Wellington price increases. Wellington Electricity Lines said its price increases should amount to a 4 percent increase on an average customer’s bill. Yet Genesis Energy customers have been told prices will rise 5.8 percent on average. Contact customers can expect a 7 percent rise.
We seem almost inured to infighting in our basic utility services - telecoms and electricity are standouts. But we shouldn’t be. The Electricity Authority is investigating the latest blame-game antics. Isn’t it time the Authority exercised some and demanded retailers provide full disclosure of what actually makes up your bill?
Meridian’s pricing structure does split out some components. It regards this as a competitive advantage. It’s not a simple exercise because breaking down the cost of transmission, lines company charges and other charges is not the same for each household. But it can be done. If retailers put as much resource into plain explicable bills as they did into obfuscating, they could crack it.
It’s true electricity supply is not the most scintillating subject – people don’t sit at dinner parties wondering at the voltage in their hosts’ chandeliers, or extoll the virtues of the current running through their refrigerator. That’s not the point.
We supposedly have a competitive retail electricity market. But we’re yet to get the basics right. Let’s make it really competitive by allowing consumers to see what makes up their bills. If a retailer wants to tell porkies about a price increase consumers will be able to see it for what it is. Let’s switch the power to the right hands.
About the author:
Sue Chetwin has been our Chief Executive since April 2007 after more than 25 years in print journalism. She was formerly the Editor of Sunday News, Sunday Star Times and the Herald on Sunday. She says there are strong parallels between consumer advocacy and journalism.
Sue oversees all of Consumer’s operations and is also the public face of the organisation. Sue is a director of the Banking Ombudsman Scheme, an alternate on the Electricity and Gas Complaints Commission and a member of the Electricity Authority Retail Advisory group.
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