Genesis reveals plan to raise power prices after Christmas

Thursday, 6 December 2018

There are lots of components in a typical power bill.

Genesis customers are getting a new year price rise.

The power generator and retailer has revealed it will increase its prices by 3 per cent throughout the country on January 8, except in Timaru and the Far North, where prices will rise 4.5 per cent.

A Genesis spokeswoman said that was due to factors including wholesale prices, the cost of carbon, operational and network costs.

'In a highly competitive market we know customers have a choice, which is why we're focussed on delivering value through tools that help our customers understand and manage their energy use.'

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She said it had been 12 months since it last reviewed its standard residential electricity prices.

Genesis has revealed it will increase its prices by 3 per cent throughout the country on January 8, except in Timaru and the Far North, where prices will rise 4.5 per cent.

Customers who are on fixed-price plans will not pay the new price until their contract expires.

It comes after a strong quarter in terms of generation for Genesis, which is putting them at the top end of their profit forecast of $370 million this year. It reported an 86 per cent drop in profit in the last financial year to $20m.

Genesis does not have to inform customers about price increases directly until they are bigger than 5 per cent.

It is common for retailers to increase their prices in April, when lines charges are reviewed by the network.

But this year, some networks have flagged the potential for cost reductions in April.

A Vector spokesman rejected the claim lines company prices were behind the move.

'While it's up to Genesis how it charges its customers, we find it a bit rich that they have cited network costs as a factor in their proposed price rises, given Auckland network charges actually dropped on average by about 1.35 per cent this year, and we have proposed to retailers, including Genesis, that average Auckland network charges will drop again next year by a similar amount. Therefore their proposed increase is effectively even higher.'

Meanwhile, Fonterra has asked to join the undesirable trading situation (UTS) complaint laid by Flick Electric, Pulse, Vocus Communications and Electricity Kiwi with the Electricity Authority, relating to wholesale price increases in October.

That month, the average wholesale price was $300 per MWh. That's just under three times the highest October monthly average previously recorded.

The retailers said the Electricity Authority should be doing more to create a level playing field in the electricity market to allow more independent retailers to operate and compete with the gentailers.

A spokeswoman for Fonterra, which has a wholesale power arrangement, said it shared the concerns raised in that claim.

She would not disclose how much the surge in wholesale prices had cost Fonterra.