M.E.D. charges

Press, 16 May 1985, Page 12

M.E.D. charges

Sir,—Surprisingly few comments have appeared in these columns since the M.E.D. announced its intention to impose a supply charge. This has now come to pass and those on whose ac-

counts the charge has appeared are most irate, and rightly so. Some explanations to justify the change have been made by spokespersons, but these have been complicated and unconvincing. The M.E.D. is in business to sell its wares, and like any other business does, should take into account all expenses incurred in providing whatever service it is engaged in to enable an adequate charge to be made. Why then in 1985 is it necessary to impose a charge for doing the things — meter reading etc., that it has always done, and on top of a 25 per cent increase? Perhaps a more simple explanation could be given or perhaps an admission that it is in fact a source of additional revenue.—Yours, etc., T. WILLIAMSON. May 5, 1985.

[The Municipal Electricity Department replies: “The supply charge is not, as your correspondent claims, on top of a 25 per cent increase, but is part of it. From April 1 of this year the bulk supply charge made to the M.E.D. has been increased by 21.8 per cent. In addition, it has been necessary to compensate for the 5 per cent reduction in M.E.D. tariffs which applied from May, 1984, which was only possible as a result of a significant surplus from the 1983-84 year, and was not sustainable longterm. The department’s retail tariffs for 1985-86 have been modified considerably to reflect the call of the Minister of Energy for a rationalisation of tariffs throughout the country and to bring a more equitable costing structure between domestic and non-domestic consumers. As a result the average domestic consumer can expect to pay 15 per cent more for electricity used and also to pay a supply charge of $3 a month. (This translates to an increase of 24.94 per cent over all). The inclusion of a supply charge is new to this department and it should be noted that the minimum charge that was advertised in previous tariff schedules is no longer applicable. The supply charge is based on the principle that every electricity consumer causes costs to an electrical supply authority, whether or not he uses electricity, and covers all consumer-related costs such as meter reading, meter testing, meter installation, inspections, consumer billing, printing and stationery, legal expenses, audit fees, bad debts and many other office and administration expenses. Up to this time the Christchurch M.E.D. has been the only supply authority in the South Island without a supply charge. This charge has been introduced as a direct consequence of the rationalisation of tariffs and at $3 a month is considerably less than some of the supply charges applied elsewhere in the Canterbury area.”]