31 Jul 2009

Electricity levy going up, pushing up power prices too

8:22 pm on 31 July 2009

The Electricity Commission is to raise the levy it charges power companies in order to cover its operational costs.

One power retailer has already announced it will pass on the extra cost to consumers.

The Electricity Commissioner, David Caygill, says the commission has to meet increased costs of about $8.5 million over the past financial year.

He says the levy covers three things: a contract with Transpower to balance the country's supply; the Whirinaki back-up plant in Hawke's Bay; and the regulator's own running costs.

The commission itself has managed to reduce its running costs by almost $500,000, he says, but inflation has lifted the Whirinaki plant's costs by $3.5 million and a new software system has cost Transpower $5 million.

Contact customers to pay about $3 more a year

Contact Energy is the first power retailer to say it will pass on the increase to its customers, at a cost of about $3 per customer per year.

The levy paid by Contact to the commission ranges from 0.145c per kilowatt to 0.186c, but Mr Caygill says the levy will vary between companies and they'll pass it on at different times.

The last time the levy was increased, he says, Contact chose not to pass on the extra cost to its customers.