Kiwis' power bills will go up next year by approximately $10 a month, with further increases to come as the electricity sector upgrades ageing infrastructure and deals with rising costs.
The Commerce Commission, which regulates grid operator Transpower and the lines companies, today released a final decision laying out how much extra revenue the companies can gather and what for.
Commissioner Vhari McWha said the high cost of living for Kiwis was a consideration but investment is needed.
"Deferring investment would mean even higher future prices and a network that does not meet consumers' needs. Consumers rightly expect a safe and reliable network and greater investment is required to deliver the capacity and resilience Kiwis demand."
Not a lot has changed since the draft decision in May, although the Commission has spread out the price increases for Kiwis in the coming years.
From April, the average household's power bill will increase by approximately $10 a month, or $120 for the first year.
After the first year, household's can expect monthly bills to increase by an average of about $5, or $60 a year, in each of the remaining four years of the regulatory period.
The cost to each household will change depending on how much electricity is used, pricing plans and their location. In some areas like Nelson the cost will be approximately $10 a month, but in other areas like the Far North it could be as much as $25 a month.
McWha said about 55% of the money will go towards covering rising costs the industry faces, while 45% will go towards increasing investment in infrastructure.
Time-of-use power plans can cut power bills by up to 20% for some households, Consumer NZ says.
New Zealand
Thu, Jun 6
4:44
Explainer
New Zealanders have been warned their electricity bills will likely increase from next year. 1News looks at what goes into a power bill and why those costs are piling up.
New Zealand
Thu, May 30
3:05
Due to population growth, and an ageing electricity network, investment in New Zealand’s electricity network is needed to ensure it is reliable and safe.
Business
Wed, May 29
3:05
"With much of New Zealand's electricity grid built decades ago, renewal work is essential to meet the future needs of consumers. 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."
The Commission has concerns Transpower won't be able to get enough specialised staff to carry out its plans so has slightly reduced its allowance, though more can still be accessed if it manages to recruit the workforce needed.
