20 Dec 2013

Call for review of energy prices

8:11 pm on 20 December 2013

Lobby groups representing electricity users say New Zealanders are being overcharged by more than $150 million a year.

They said this was due to an error in the way the Commerce Commission calculates how much profit Transpower and lines companies can make.

The executive director of the Major Electricity Users Group said the problem was identified in a High Court ruling.

Ralph Mattes told Radio New Zealand's Checkpoint programme on Friday the return suppliers are getting on capital after tax is higher than it should be, resulting in about $150 million a year of extra charges to consumers. His group is one of three calling on the commission to take urgent action.

"No doubt they will write back to us at the beginning of next year and they will then formally issue a notice of intention to get on and review the cost of capital.

"Of course they won't just sort of accept what the High Court has said, but there will be a formal review. We think that we will prevail in that and by the 30th of September will have the cost of capital changed."

Mr Matthes said they also have the option of taking the matter to the Court of Appeal where, if successful, a claw-back of about $500 million could be awarded. That money would be paid to consumers in the form of a rebate.

Appeals must be filed by 14 February next year.