29 Jul 2016

Northland power price hike an economic 'disaster' - mayors

11:33 am on 29 July 2016

Northland councils are warning that new transmission prices planned by the Electricity Authority would be a deadly blow to the region's economic development.

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Photo: 123rf.com

National grid charges in the north have risen by 80 percent in the past decade and the region's mayors say the Authority's latest proposal would add 76 percent - another $15 million total - to Northland power bills.

Far North Mayor John Carter said the funds were being used mainly to increase the security of supply to Auckland, while Northland's security of supply had plateaued - if not declined.

Far North District Council Mayor John Carter

Far North District Council Mayor John Carter Photo: Supplied

Mr Carter said it was unfair to use funds from one of the country's least affluent regions to subsidise its most affluent city.

In a statement, the mayoral forum representing the Far North, Kaipara and Whangarei councils said the financial impact of the new transmission charges on large-scale industries such as AFFCO, Refining New Zealand, Carter Holt Harvey and Juken Nissho could cause some to walk away from the region, while smaller businesses could go under.

"Economically it would be a disaster," Mr Carter said. "We seriously can't let it happen."

The mayoral forum said the government was sending mixed messages about regional development in Northland.

In February this year it had launched the Tai Tokerau Economic Action Plan, to fix an under-performing regional economy.

"But six months later, the government's proposing to pull $15 million out of the economy - (via the national grid charges) with no compensation," the mayors' statement read.

Northland had also lost EECA funding for its most needy homes under the Healthy Homes Tai Tokerau insulation programme, making the battle against rheumatic fever that much more challenging, the mayors said.

Far North Lines company Top Energy also lodged protests against the Electricity Authority's proposed new pricing regime.

It was aiming to generate enough power within a decade from its expanded Ngawha geothermal stations to make the Far North self-sufficient in electricty.

The mayors said that at that stage Northland's transmission costs for the national grid would need to drop, and the new pricing methodology should be flexible enough to allow for that.

For now, they argued the benefits of the Electricity Authority's national grid upgrades had clearly stopped at Auckland - and Northland should be excluded from the proposed new pricing system.

Mr Carter said the mayors were hopeful the Authority would reconsider.

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