Price of electricity

Press, 6 April 1989, Page 20

Price of electricity

Sir, —I was almost literally electrified when I heard the Minister of Energy, Mr Butcher, assert on the midday news today that the price of electricity to the consumer has dropped over the past year. I have looked out the

electricity accounts we have received (and paid) over that period and they read as follows: Date of reading, February 9, 1988, Rate per unit, 6.703 c; April 6,6.814 c; June 1,7.758 c; July 28, 7.758 c; September 21, 7.758 c; December 9,8.033 c; March 1, 1989, 8.068 c. I challenge Mr Butcher to explain publicly, through the media, how he twists these figures to show that the price of electricity to the consumer in this area has done anything but increase steadily over the ,past year and more.— Yours, etc., ANNE THOMSON. March 16, 1989.

[The Minister of Energy, Mr Butcher, replies: “The first point I was making was that Electricorp ‘had managed to reduce the real costs of generating electricity by about a quarter since it took over,’ and this increased efficiency can only be good for consumers. The secoid point was that ‘real electricity prices have been going down because simply they have been held.’ To the extent that the bulk electricity tariff has been increased at less than the rate of inflation, over the last few months or so, it has fallen in real terms. The third point was that 'those benefits are now flowing on to the general public,’ as some supply authorities hold or reduce their consumer tariffs. But, equally, I accept that there have been some significant consumer price increases, as your correspondent indicates, resulting from costs incurred by supply authorities, or a restructuring of tariffs to more accurately reflect costs. My fourth point was that we can expect further cost advantages in real terms as Electricorp finds markets for the present surplus of electricity, and hence reduces its average cost of generation.’’]