Power cost changes ‘concern industry’

Press, 9 November 1984, Page 6

Power cost changes ‘concern industry’

Changes in electricity charges in the Budget would greatly concern South Island industry, said the executive 'director of the Canterbury Manufacturers’ Association, Mr I. D. Howell.

The raising of the differential in power prices between the North Island and South Island to 10 per cent would not offset the impact of a 25 per cent rise in the average bulk-electric-ity tariff, and the loss of the 20 per cent concession to South Island industrial users, Mr Howell said. The differential, now 6 per cent, will rise from next

April 1, as intended by the previous Government. The bulk tariff increase will also take effect from April 1, while the South Island industrial concession will be phased out until March 31, 1987. Mr Howell said that South Island industries would be concerned also at the Budget’s 35 per cent average increase in prices charged by State Coal Mines for nonexport sales.

Industries in the south now hit by these higher electricity and coal charges did not have the advantage enjoyed by North Island industry of natural gas as

an alternative energy source, said Mr Howell. He questioned whether electricity-generation plant had not been' revalued upwards to current values, something which many industries were unable to do under the present price controls. Such revaluation could have been used to justify higher electricity charges to meet the “full cost supply” as stated in the Budget.

Mr Howell suggested that the higher charges now “put responsibilities on power distribution authorities to see what they can do to assist industries.”