Average household to pay $10 more a month for new power lines charges

Consumers will soon begin paying a lot more for electricity lines charges with average monthly increases of between $10 in the main centres to as much as $25 in some regions.

But that is just the beginning.

Rates will continue to rise in each of the following four years so that consumers will see their lines charges cost $30 a month more in five years time to as much as a $85 a month in some regions.

The Commerce Commission said consumers will benefit from its decision to allow the national grid owner, Transpower, and local lines companies to charge more for services to a maximum allowable total revenue of $5.9 billion for the next five years.

It said higher inflation and interest rates relate to about 55 percent of the increase in revenues.

The regulator said the increased revenue was needed to cover the cost of "significant investment required" to maintain and upgrade electricity network over coming years.

"While the decisions mean there will be an increase in the prices most consumers see in their electricity bills, we also understand the importance of incentivising businesses to invest, improve, and meet consumer demands," commissioner Vhari McWha said.

"Deferring investment would mean even higher future prices and a network that does not meet consumers' needs."

The average household's monthly electricity bill will rise about $10 ($120 annually) for the first year of the five-year regulatory period, which starts on 1 April 2025. In each of the next four years the rate would rise an additional $5 a month.

However, some regions would pay much more with an additional average of $25 a month in the first year and additional average increase of between $5 and $15 in each of the next four years.

McWha said factors such as a growing population, an increase in extreme weather events, and greater reliance on electricity as a fuel, for uses like transport and industrial process heat, continue to test the capacity and resilience of the country's electricity network.

"With much of New Zealand's electricity grid built decades ago, renewal work is essential to meet the future needs of consumers," she said.

"The revenue increases reflect the higher costs companies are facing, including the cost of borrowing, cost of materials and inflationary pressures since the last revenue review in 2019."

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