Powerco’s new pricing structure to electricity retailers contains no fixed charges for residential users, Chief
Executive Steven Boulton announced today.
The change effective from 1 November 2001, means that Powerco will be charging retailers based solely on the amount of
electricity consumed for those users who have a peak demand of less than 100 kVA (this is equivalent to the demand of
around 30 homes). Charges to other user groups (large commercial and industrial customers) will continue to include
fixed and variable components.
One of the other key aspects of the new line charge structure, is the inclusion of pricing signals to retailers that are
designed to encourage network utilisation and energy efficiency. This encourages them to install equipment that allows
efficient management of electricity load peaks, said Mr Boulton. “This aspect of the pricing structure is a positive
step toward energy conservation,” he said.
“We are also happy that we have been able to meet the government policy statement of having less than 10% of our line
rental fixed,” said Mr Boulton. However, the impact on residential users will depend on how the retailers operating on
Powerco’s networks choose to interpret the structure into tariffs for their customers.
“Over and above these changes, we have also been able to reduce the overall charges to retailers for using our lines,”
Mr Boulton said. Under the new structure, around 70% of residential users would see a reduction in their line rental
costs if passed straight through by the retailer.
The new pricing structure has a number of advantages including encouraging energy efficiency, sending more accurate
investment signals to the industry, and being less complex, Mr Boulton said.
Powerco is New Zealand’s third largest electricity and gas utility with around 205,000 customer connections. Powerco has
networks in Taranaki, Wanganui, Manawatu, Wairarapa and Wellington with an asset base approaching $875m.