New Zealand energy bills set to rise as business costs mount

Some New Zealand energy bills will rise from April after power company Mercury announced its prices will rise this year.

The lift, prompted by higher business costs, will provide little comfort for households struggling with a cost-of-living crisis as domestic inflation continues to bite.

Mercury's new prices will be between 5 and 8 percent higher than last year for most customers and come after the company's profits slumped in the first half of the fiscal year.  

"There are two key drivers to price increases: one is inflation and the other is need for investment," explained Bridget Abernethy, the chief executive of the Electricity Retailers' Association.

She told AM the impacts of inflation were economy-wide at a time when significant investment was needed.

"There is a significant amount of investment required to ensure a reliable and secure electricity system, and to support a good, strong energy future for New Zealand - including a low-emissions economy.

"The fact is, we're just really ramping up now into ensuring that we've got adequate infrastructure in place to provide that reliability and resilience that we need into the future - this is a critical decade," Abernethy said.

Watchdog group Consumer NZ has said people should never settle with a power company and urged Kiwis to shop around for better deals.

In an earlier announcement, Genesis Energy also said it was raising its prices again - citing inflation.

Analysts have said core inflation would remain for some time despite consumer price expectations continuing to fall.
"Getting [non-tradeable] inflation from 5.9 back sub-three, or even to 2 percent, we're a long way away from that," said independent economist Cameron Bagrie.

But Abernethy didn't believe power companies were using inflation as an excuse to hike prices.

"I think we've got a world-class energy system in this country... for affordability, reliability and sustainability and I actually think we should take a lot of comfort that the companies in the electricity system are putting in the appropriate investment in a timely manner."