30 Sep 2008

Govt spotlight on rising power prices

7:24 pm on 30 September 2008

The Government has promised to look into what it is calling "alarming" electricity power price rises.

Households throughout New Zealand are facing price increases, with Contact Energy on Tuesday announcing hikes of at least 10% in Otago and Wellington due to what it says is high demand.

Meridian and Trustpower have already put their prices up, while Auckland's Mercury Energy is to raise its prices from Wednesday.

Energy Minister David Parker says it is "difficult to comprehend" the price gaps between residential and industrial use.

Mr Parker says there is a concern that Contact Energy is raising prices in the South Island when there is no real competition in that market, and does not accept Contact's excuse for doing so.

He says Cabinet will be asked on Monday to consider whether or not a broader inquiry into the price increases is needed.