Powerco electricity distribution charges to change from 1 April 2015

Thursday, March 05, 2015

Powerco has announced that combined electricity distribution and transmission charges for more than 325,000 customers across the North Island will drop by just under half a percent, effective 1 April 2015.

Powerco General Manager Electricity Andrew McLeod said Powerco bundled its charges with transmission charges and the combined costs would reduce by an average of 0.46% from 1 April. That translates to around a 40 cent reduction per month in lines charges for the average customer connected to Powerco’s electricity network - or $4.80c per year.

Mr McLeod said it was important to note the 0.46% reduction was an average across Powerco’s entire electricity network and therefore different customers in different areas with different energy requirements might see variations in changes to their line charges. (see table 1 below)

The variances between regions and consumer groups were to ensure that all consumers across Powerco’s various regions and consumer groups paid a fair and equitable amount, Mr McLeod said.

Any differences were also to allow for a re-balancing of the company’s charges to ensure they better reflected underlying costs, he said.

Powerco invoices electricity retailers for combined distribution and transmission charges, and retailers determine the final price of delivered energy to customers by adding in their own costs and the cost of generation.

Table 1: Average movement in network charges by region

The Commerce Commission has determined that Powerco’s maximum allowable revenue for the 2015-2016 pricing year is $250.7 million, which the commission determined was a 0.16 per cent increase on the prior period.

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