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Regulator takes issue with penalty charge

NZ NewswireNZ Newswire 4/04/2016 Pattrick Smellie

The Electricity Authority says plans by the Hawke's Bay electricity lines operator, Unison Networks, to charge a special tariff effectively penalising households that install solar power units on their rooves are out of step with its recommendations.

Unison's new charge would as much as halve the average $300 in annual savings that a photo-voltaic solar electricity generation unit could produce for an average Hawke's Bay household. The move has angered the Labour and Green parties and provoked a complaint to the Commerce Commission, which the competition watchdog says is not its territory.

However, the Electricity Authority acknowledged that the EA had "recently consulted on these types of issues as we identified that distributors need to change their prices to reflect the services they're delivering and the cost of those services."

"However, Unison hasn't followed our approach as they haven't related their prices to the services they're delivering," said the EA's chief executive, Carl Hansen.

"Our approach would increase choices for consumers. Unison's approach provides no additional choice of services for consumers."

The Labour Party's energy spokesman and MP for Napier, Stuart Nash, said no such charges were applied when electricity users switched some of their consumption to natural gas.

"If consumers move their appliances from electricity to gas, there is the same effect of falling electricity usage, but power companies don't charge them more for their electricity," Nash said, pointing to research by Auckland-based lines company Vector that showed three-quarters of consumers installing solar PV units were in the upper half of electricity users.

Hansen noted that 99 per cent of residential consumers on the Unison network are not affected by Unison's new price category.

"The new price category currently only affects those consumers who install solar from April 1," he said.

Unison justified the price increase by saying that it cost around $900 a year to maintain a household connection to its network. By reducing their use of grid-supplied electricity while maintaining a network connection for back-up power, they would be loading additional network fixed costs onto non-solar customers. Its new tariff still left households with solar PV installed around $150 to $190 a year better off.

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