11 Aug 2013

Smelter deal 'keeping power prices high'

8:06 am on 11 August 2013

An electricity lobby group is questioning whether a deal to keep Southland's aluminium smelter at Tiwai Point going is the best use of resources.

State-owned power company Meridian Energy and New Zealand Aluminium Smelters (NZAS) announced on Thursday they had reached a deal that cut the price of electricity to the smelter by an undisclosed amount .

The agreement means 14% of New Zealand's total electricity production will continue to go to the Tiwai Point.

Meridian says if that electricity was made available to general users, it would increase the supply of electricity and probably lower its price.

The Domestic Energy Users' Network says there are other ways to use that power that could result in more stimulation for the economy.

Its secretary, Sarah Free, says households could get some relief from high power prices and other industries could benefit from low-cost electricity.

Grey Power says the deal could keep electricity prices for ordinary consumers high. Energy spokesperson Allen Davies says the average person is already paying too much for power and called on the Government to regulate the power market.