Electricity price ‘will rise 25%’

Press, 19 September 1986, Page 4

Electricity price ‘will rise 25%’

PA Dunedin Electricity prices will increase next year, possibly as much as 25 per cent, said the retiring president of the Electrical Supply Authorities’ Association, Mr Innes Kerr-Taylor (Waitemata) in Dunedin yesterday. Inflation and GST wiil combine to increase the bulk electricity tariff for 1987-88. Once the detail of the new corporation is finalised, it could go as high as a 40 per cent increase in following years, he said. Predictions of such increases have angered the Minister of Energy, Mr Tizard, who told the association on Wednesday that such prophecies

“stem either from ignorance or malice.” A member of the corporation’s establishment board, Mr Jim Scott, said the bulk tariff would be held constant in real terms for 1987-88. "This is welcome news, but it still means a bulk tariff increase of about 25 per cent, with GST on top of the inflation rate,” Mr Kerr-Taylor said. Taking taxation effects into account, he suggested the price could rise as much as 30 per cent.

Asset valuation was a key issue in future electricity pricing and supply authorities must have a big input on behalf of their consumers, Mr KerrTaylor said.

There was disagreement with the way the Treasury wanted to value the Electricity Division’s assets for transfer to the corporation.

There was also a need for the supply authorities to counter the “obsession” with competition by the “solid background of service our industry has given the country,” said Mr Kerr-Taylor. Regionalisation of the bulk supply tariff was another pressure facing the association. The advisory committee had recommended the bulk tariff be abandoned, and replaced by tariffs specific to each customer and/or point of supply.