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Regulator approves applications by Powerco and Wellington Electricity to lift prices

Wednesday 28th March 2018

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The Commerce Commission has approved an application by lines company Powerco to raise prices to fund a $1.27 billion upgrade of its network. It also gave Wellington Electricity a green light to increase prices to fund its earthquake readiness plan.

Regarding Powerco, "our final decision is largely unchanged from our draft. This investment, which is a third more than Powerco has spent on its network in the past five years, is necessary to maintain a safe, secure and reliable network for its customers,” Commissioner Stephen Gale said in a statement. 

As a result of the upgrade, the commission expects a typical Powerco consumer’s monthly bill of $210 would increase by about $2.70. "As only a portion of the increased expenditure will affect prices immediately, we also expect a further increase of about $6 a month from 2023 when pricing will reflect all completed investments," it said. 

In June 2017, Powerco applied to the commission to increase its prices to allow it to replace parts of its network built in the 1950s and 1960s and nearing the end of its life. The network is also under increasing pressure from powering regions with strong growth such as Tauranga.

The new prices will apply from April 1 and the New Plymouth-based company will have to report annually to both the commission and its consumers about how its investment is tracking against its proposal.

Separately, the commission approved Wellington Electricity’s application to invest an additional $31 million to improve its network’s resilience to a major earthquake.

In December 2017, Wellington Electricity made an urgent application to the Commission to increase its prices to fund earthquake strengthening of its substations, and purchasing emergency equipment and critical spares.

"We remain satisfied that the expenditure is needed and has been costed appropriately to ensure Wellington’s network is better prepared to withstand a major earthquake," said Gale. 

The commission expects investment will result in a typical Wellington Electricity consumer’s monthly bill of $185 increasing by about $1.70.


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