Electricity Asset Swap Will Cost Us Each $89 A Year
May 26th, 2010
The Major Electricity Users Group has some bad news for domestic power consumers going into winter – the Govt’s electricity asset swap is set to cost domestic electricity consumers at least $89 each year.
Wholesale prices rose in February and soared in March. Meridian Energy explains it needs to “conserve” water in its South Island hydro lakes, because its Tekapo power stations are being transferred to Genesis. It claims this creates a risk of running out of hydro energy if the year is dry. Meridian held back so much generation spot prices in the North Island rose to 12 c/kWh in March. If the trends of the previous three years had been followed, the price would have been only 6c/kWh.
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Analysts say the Govt’s recent policy decisions will lead to higher, not lower, prices to consumers, even though its electricity decisions were designed to make the market more competitive. This may well happen – but competition comes at a cost. The costs can be very significant, and we may not yet have seen the end of them.
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