Reports of $80 power decrease for Southlanders off the mark

Thursday, 11 June 2020

Reports that Southlanders' power bills are set to drop $80 by about each year are off the mark, PowerNet chief executive Jason Franklin says.

On Wednesday the Electricity Authority announced new guidelines for transmission pricing.

It prompted reports that Southlanders would be the big winners from the changes.

Those reports suggested Southlanders were in for an overall percentage decrease of $80 to their annual power bill, while households in the King Country or eastern Bay of Plenty would likely be paying about $30 more.

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However, Franklin suggested the transmission pricing changes would in fact have little effect on Southlanders’ power bills.

It was forecasted some Southlanders would pay slightly more and some slightly less from 2023, Franklin said.

The misunderstanding it seems has stemmed from the fact that the Electricity Southland Ltd distribution network - also known as the Lakeland Network - was projected to receive an overall percentage decrease of $80 a year.

However, Electricity Southland supply to the Frankton area in Queenstown and also Wanaka, not the Southland region.

“Electricity Southland is a small electricity distribution network that supplies parts of Frankton and Wanaka. It makes up less than 10 percent of the customer base in the Queenstown – Lakes Region,” Franklin said.

PowerNet is the electricity network management company that delivers power to Invercargill, Southland, West Otago, parts of Central Otago, and Stewart Island.

The electricity networks it manages include, The Power Company Ltd, Electricity Invercargill Ltd, and Electricity Southland Ltd.

PowerNet has 70,500 customers in total, with just 2000 of them with Electricity Southland Ltd.

Franklin said The Power Company Ltd supplied 37,000 customers in Southland, whose charges were projected to go up, by slightly less than $10 a year.

Electricity Invercargill Ltd supplied 17,000 customers, and their charges were projected to decrease by slightly more than $20 per annum, he said.

The Electricity Authority also said the new guidelines will not increase charges overall.

For the PowerNet managed networks, the proposed overall distribution pricing change was very modest, Franklin said.

“Overall, the transmission price reduction is 0.5 percent. Of the current $18.4 million in transmission charges, the proposed methodology will result in charges reducing to $18.3 million.”

The guidelines include a cap on charges to protect consumers and directly connected businesses from big price increases.