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Contact Energy says it is not using ETS as a cover

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 30 NZPA - Contact Energy Ltd is rejecting suggestions it is using the emissions trading scheme (ETS) as a cover for increasing prices.

Contact said the ETS would result in an average residential price rise for its customers of 3.2 percent. For an average residential customer this works out at around $62.37 for electricity and $21.87 for gas per annum.

But customers on the company's two winter price promise promotion in Hawke's Bay, Eastland, Wellington and Christchurch will not receive a July 1 electricity increase.

Dunedin customers face a 6 percent price rise, excluding the ETS increase as their price has not moved in 20 months.

The Commerce Commission today warned businesses that they must not mislead consumers about the reasons for price increases.

The commission cited the 2.5 percent goods and services tax increase in October and the debate about power price rises resulting from the ETS.

Prime Minister John Key and some of his ministers have in recent days warned power companies -- some of them state-owned -- that price gouging in the face of the ETS was not acceptable.

"I'm concerned because some of the power companies are claiming that the emissions trading scheme is the reason they want to raise prices by double digits," Mr Key said today. "Well that can't possibly be the case, the estimates we've had is at most a 5 percent increase in power prices, and in the majority of cases it will be less than that."

While some companies have signalled retail price increases after July 1 as a result of the ETS coming largely into effect, others haven't.

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