28 Nov 2014

Electricity prices to fall from 1 April

1:37 pm on 28 November 2014

Electricity distributors are generally happy with the new pricing which takes effect on 1 April, according to the Commerce Commission - though some areas will experience big increases.

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The new prices will take effect in April and run until March 2020. Photo: PHOTO NZ

The pricing for the next five years, to March 2020, is close to the draft released by the commission in July.

It would see a modest nationwide average price decrease of 1.1 percent, with regional variations ranging from an increase of 12.5 percent to a decrease of 14 percent.

From 2016, most distributors would have prices capped to the rate of inflation, although some smaller distributors would be entitled to exceed the cap.

Commerce Commission deputy chair Sue Begg said the new pricing struck the right balance to keep suppliers from earning excessive profits, while ensuring they had adequate revenue to meet quality and reliability standards.

"I think that the general feeling is that it is business as usual, that overall, the change in prices is flat, or a relatively small decrease."

Independent energy analyst Molly Melhuish said, on average, consumers will pay $25 less a year.

In some areas, such as Central Otago, Tasman and in particular Wellington, the prices would drop further, she said.

"This would be expected to see a drop of more than $25 a year. Maybe $50 or $100 a year."

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