John MacDonald: Is user-pays being taken too far?

Canterbury Mornings with John MacDonald

We'll be chewing through the power in the south this week with the frosty weather.

Which is the "ideal time" for Transpower to reveal that the budget for a major upgrade of electricity transmission lines in the South Island has increased again and that South Islanders will be paying for it.

Which raises the question: Is this taking user-pays too far? And I think it is.

What’s happened, is Transpower is upgrading its lines north of Twizel. Because, the way things are going, they won’t be able to cope with increased demand for power in the next few years.

But it’s going to mean higher power prices for those of us in the south. Because Transpower says we’re the ones who are going to benefit the most.

This is at the same time as new data from Statistics NZ shows power prices have gone up 6.2 percent in the past year and Consumer NZ says one-in-five people have had difficulty paying their power bill in the last 12 months.

Transpower’s original budget for the upgrade project was $77 million; earlier this year it increased to $164 million; and today we’re finding out that it’s sitting at $193 million.

The project is being driven by growing electricity demand because of population growth, electrification of industry and transport, and new developments in Christchurch and Selwyn.

If nothing’s done, the grid won’t cope and we could see the system overloading within the next five-or-so years.

But I’m with the likes of Westpower's Mark Blandford, who supports the project but isn’t happy at how costs are being allocated to South Islanders, which he says penalises the regions.

John Harbord, from the Major Electricity Users Group, supports the need to invest in the country’s electricity grid but is worried about the impact on power bills.

He says some businesses are finding electricity price rises so expensive that they’re struggling to operate.

Which backs up the case for everyone around the country to be carrying the cost of these upgrades.

Tell that to Transpower, though.

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