Details sought of bulk power

Press, 17 May 1989, Page 3

Details sought of bulk power

By

KAY FORRESTER

The National spokesman on State-Owned Enterprises, Mr lan McLean, yesterday called for bulk electricity price deals to be made public when he released average prices paid by suppliers to Electricorp during the last three years.

Mr McLean claimed the figures, which he got from Electricorp under the Official Information Act, showed for the first time how well electricity suppliers had performed.

The figures list the average price per kilowatt hour paid by suppliers for bulk power bought and the percentage increases each supplier paid from the 1986-87 year to 198788 and from 1987-88 to 1988-89. The South Island figures „ show Riccarton Borough Council to have paid the highest per kilowatt hour purchased — 6.04 c. The Christchurch Municipal Electricity Department paid 5.86 c per kilowatt hour but had the greatest percentage increase for the 1988-89 year of 8.6 per cent. Mr McLean said suppliers should use the figures to “check their record against their neighbours.” South Power’s general manager marketing and supply, Mr Graham Hodge, said there were too many variables in wholesale prices to make a comparison.

load factors, different mixes of commercial, industrial and domestic consumers, some had their own generation capacity, different contract periods and dates. All affected the bulk price.

He believed there was more value in a comparison of retail tariffs, those paid by the actual consumer.

An international survey, released in Sydney yesterday, showed New Zealand’s industrial and commercial retail tariffs among the cheapest in the world. The average cost to New Zealand consumers is 8.43 c a kilowatt, compared with 8.59 c last year.

Mr McLean said Electricorp had “tightly insulated its prices against public scrutiny.” “Both Electricorp and the electricity retailers are public monopolies. None have the right to hide details of their dealings from the public. Secrecy breeds inefficiency and corruption.”

He called on individual suppliers to make public their purchase price agreements if Electricorp would not.

Mr Hodge believed con-

sumers were getting a better deal since individual suppliers began negotiating contracts with Electricorp a year ago. Confidential negotiations allowed for true competition and flexibility in price setting, he said.

The needs of individual suppliers could be taken into account in negotiation.

“If the consumers are getting a better deal why should the confidentially that allows that be abandoned?” he asked. Riccarton’s borough clerk, Mr Don Hampton, however, preferred the days when the bulk price of power was the same to all suppliers. “Now the big buyers get a buyer’s advantage,” he said.

“The M.E.D., for example, is a member of the ‘4O megawatt club’. Electricorp does deals with the big buyers.” Mr Hampton did not say Riccarton consumers were disadvantaged under individual negotiation but said retail tariffs better reflected the efficiency of each supplier when the bulk price was the same to all.

Suppliers had different