29 Jan 2014

Help for battlers urged instead of changes to markets

6:02 pm on 29 January 2014

Mighty River Power chief executive Doug Heffernan says policymakers should concentrate on ways to help those struggling to pay their bills rather than trying to change consumer markets.

The Electricity Authority on Tuesday released an analysis it said showed people had been paying too little for power in the past and prices were fair.

Dr Heffernan said the report dispels the myth that hydro power is cheap. He said current prices would be higher still if alternatives such as geothermal and windpower were not being used.

Dr Heffernan said his company was reducing disconnections by encouraging customers onto new pre-pay meters and the industry was talking to the Government about what other measures could be taken.

"From an overall societal point of view, really focusing on people in struggle street that are really struggling to deal with the bills, rather than the whole consumer market, is obviously where much greater benefit can be got to those who really, really need it."

Dr Heffernan accepted some low-income families struggled to pay their power bills, but said it was not as simple as saying prices were too high.

He said the Government needed to address the issue that some families struggled with paying their bills, including power. Because they may not be unable to afford new appliances which are more efficient, he said they ended up using more electricity. And those families often missed prompt payment discounts.

Dr Heffernan said the industry was looking at new technologies to help with this, including pre-paid power.

Independent energy analyst Molly Melhuish said politicians should focus on the regulatory framework as well as policies to help householders.

"I expect the different parties to vie with each other for the most generous scheme, as well they should."

Mr Melhuish said the Electricity Authority analysis was based only on a model, not real figures, and companies should be forced to release those figures.

Earlier, economist Geoff Bertram claimed the report from the Electricity Authority saying New Zealanders haven't been paying enough for their power was wrong.

Dr Bertram said that when the electricity network was set up there was no expectation that electricity generation would turn a profit.

He said that later changes turned generators into profit-driven companies, which were now charging unreasonably high prices, and encouraged the Government to step in with stronger regulation to bring power bills down.

http://www.radionz.co.nz/national/programmes/morningreport/audio/2583836/economist-accuses-electricity-authority-of-getting-it-wrong Listen to more on Morning Report

No free ride, says Electricity Authority

The Electricity Authority denies it is giving power companies an easy ride at the expense of consumers struggling with rising bills.

Chief executive Carl Hansen said it generally gets good cooperation but has forced companies to hand over figures when necessary. He said the authority is a tough regulator, which makes decisions in the interest of consumers.

Mr Hansen said the authority released a consultation paper on Tuesday on making more information available to consumers so they can decide more easily whether to switch suppliers.