Powerco drops fixed line charges

By Phil Boeyen, ShareChat Business News Editor

Wednesday 29th August 2001

Energy company Powerco (NZSE: PWC) says residential consumers stand to benefit from changes in pricing to electricity retailers.

The company says its new pricing structure contains no fixed charges for residential users, effective from the start of November. Charges to other user groups such as large commercial and industrial customers will continue to include fixed and variable components

Powerco chief executive, Steven Boulton, says the company is happy that it has been able to meet the government policy statement of having less than 10% of its line rental fixed.

"However, the impact on residential users will depend on how the retailers operating on Powerco's networks choose to interpret the structure into tariffs for their customers."

Mr Boulton says the company has also reduced the overall charges to retailers for using its lines, and under the new structure around 70% of residential users will see a reduction in their line rental costs if the changes are passed through by the retailer.

"The new pricing structure has a number of advantages, including encouraging energy efficiency, sending more accurate investment signals to the industry, and being less complex," says Mr Boulton.

Powerco is New Zealand's third largest electricity and gas utility with around 205,000 customer connections and networks based in the middle and lower North Island.

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