Sharp power price rises hit business

Friday 20th July 2001

By Nick Smith

Businesses are facing massive hikes in their power bills as contracts with energy suppliers lapse.

One business is facing a rise in electricity charges of 25% - effectively an extra $90,000 a year - and it has been told by its supplier to "take it or leave it."

It shopped around, getting three quotes - the best representing a 40% increase from Genesis, 303% from Contact and the spot price from On Energy.

The spot price may vary from 17-25c/kWH, about $29,000 to $47,000 extra a month.

The dry winter and resultant low lake levels have seen electricity prices surge and businesses coming off two and three-year contracts are now being hit hard.

In many cases, spot wholesale market prices are now five times higher than this time last year.

The Employers and Manufacturers Association (Northern) is looking into the situation and in a letter to the government said there was little competition "with take it or leave it offers, as to both price and duration."

It said businesses were effectively being forced to take two-year contracts as the suppliers refused short-term arrangements.

"Certainly there is no upper limit to which spot prices could climb," the association said.

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