S.I. power price ‘already fair’

Press, 20 September 1985, Page 2

S.I. power price ‘already fair’

By

OLIVER RIDDELL

in Wellington

The South Eland power differential is close to the fairest value that can be justified at present, says the Minister of Energy, Mr Tizard. He told the annual conference of the Electrical Supply Authorities’ Association at New Plymouth that he was afraid that many South Island interests would have great difficulty in accepting that.

Electricity pricing between the North and South Islands had been the subject of discussion for some time.

A 10 per cent differential now favoured the South Island, but many South Island interests had been pressing for a much bigger difference, Mr Tizard said. Arguments advanced to justify an increase included a view that the generating stations belonged to the South Island, that much electricity landlocked in the South Island could not be transferred North, that be-

cause it was colder in the South Island electricity prices should be lower, and that lowering the price of electricity helped regional development.

Generating stations had been financed in common by all electricity consumers as part of an integrated national network. Power from South Island hydro stations was not markedly different in cost from that from new thermal stations in the North Island.

Mr Tizard said he was aware that a national power generation plan avoided the South Island having surplus electricity. Also, to vary the price of electricity away from its costs was a most expensive form of regional development. The transmission system between the two islands represented the difference in the cost of supply. That cost would not justify a differential of much more than 10 per cent, Mr Tizard said. In spite of Mr Tizard’s statement, the committee of South Island Government members of Parliament plans to continue to lobby him on the 10 per cent differential. Mr Jim Anderton (Lab., Sydenham) said Mr Tizard’s comments had not closed off all the options. He declined to say what the South Island members had put to Mr Tizard, but he did say he was still hopeful of a positive outcome on the detailed submissions made.