Power price hikes bite into tax cuts
4:00AM Wednesday Oct 01, 2008
By Jarrod Booker

The Government has pledged to investigate "alarming" increases in power prices as escalating costs continue to eat into tax cuts.

From today, workers have between $12 and $28 more a week under the Government's first round of tax cuts, while superannuitants and recipients of Working for Families also get more in their pockets.

However, the impact of these measures has already been eroded by heavy increases in the cost of living, and substantial power price rises will further eat away at them.

Contact Energy has announced it will increase prices by an average 11 to 12 per cent for customers in Wellington and the South Island from next month.

From today, Mercury Energy's central Auckland customers face an average increase of 4 per cent, while customers in Manukau, Papakura and Franklin face increases of between 2.5 and 5.7 per cent.

Commerce Minister Lianne Dalziel said she failed to see how Contact Energy's increases could be justified.

Contact has blamed a lack of transmission and generation capacity, but Energy Minister David Parker said that did not seem to make sense.

More here.