Smelter power Moes not cover costs’

Press, 12 June 1987, Page 4

Smelter power Moes not cover costs’

Comalco - * price* compered with other wholenle consumers

By I

BRENDON BURNS

io Wellington

Comalco statements made in > its fight against Government moves to increase its power price have been challenged by the Minister of Energy, Mr Tizard. Mr Tizard has told'the aluminium company that it will now negotiate with Electricorp. ■ “Comalco frequently refers to the fact that its electricity price has increased at a greater rate than electricity prices generally,” he said. “This

simply reflects the fact that , the company’s base price was very low to begin with.” ■ . It was still paying significantly below what all other, consumers had to meet; at 55 per cent of' the bulk price, he said. Mr Tizard challenged Comalco statements that supplying power to the Bluff smelter ..was:highly profitable for the. Government It was not even covering costs, he said. Average South Island prices had risen almost ; 23 per cent id : > the last.', two years.

while Comalco had faced an increase of ; less than 9 per cent - • Mr Tizard said that Comalco’s power contracts discriminated un- ; fairly against. '■ all other electricity users. 7 : “Because of. this;. .the Government is determined to place electricity supply to the smelter on a commercial basis.” If Electricorp and Comalco could not reach agreement, the Government would consider using wgislation to end . the contracts, Mr Tizard