A power bill closing in $1 million over budget is causing some anxiety for the Rotorua Lakes District Council.
News of the over-run has prompted an exasperated cry from seasons councillor Charles Sturt.
“Those bloody electricity charges are causing us a nightmare,” he harrumphed at the council’s operations and monitoring committee meeting recently.
He called the pricing “a rort”.
And he suggested the council should approach the Government to try to ease costs.
His comment followed a tabled report that council’s electricity pricing was $802,843 over budget at the end of last December.
The council’s chief financial officer Thomas Collé, who presented a six-monthly report on the council’s performance, said at the operations and monitoring committee the prices were driven by the “severe spike” in spot prices from October following unfavourable supply/demand variables.
“Concerns remain around the future direction of spot prices this year particularly as rainfall and wind levels are below normal levels,” Thomas says.
“The expected shutdown of the offshore Pohokura gas pipeline in March will continue to add pressure to the spot price.
“Options remain under consultation to mitigate against this risk including forward hedging and fixed price variable volume contracts but will themselves come at an additional cost and further analysis is underway.
Charles, who chaired the meeting, says a number of people had rung him about the “electricity thing”.
“The electricity companies used the excuse the lake levels were low, that the price had to go up because they didn’t have the capacity.
“Now the lakes are higher levels than they’ve ever been, at record levels, and they are discharging because they can’t hold it.
Now they [the electricity companies] are using the excuse of shutting down major infrastructure and having to maintain it. But when the levels were low too, they had to maintain it – who’s ripping us off?
“I think it’s getting to a stage where we as a local government sector need to engage the Minister of Energy or the Prime Minister and the Government.
“This is an absolute rort.
“It’s not only happening to us as a local sector government, it’s happening to us in our homes. It’s getting to the stage where people are having to turn things off.
“Am I reading it wrong or am I have I got it right?”
Thomas says he was far from an expert in this area.
“Last financial year we had high pricing because of a low lake levels,” says Thomas.
“This year-round we look at the NIWA forecast and the lake levels and they were expecting higher than average rain in the South Island, and they actually got that.
“The lake levels as I understand it last week were at 94% so they were not at their maximum but at a healthy level.
“It’s just unfortunate that one of the main gas fields providing gas to New Zealand was down due to a leak in the pipe that took a month to fix.
“The questions you ask are some of the questions the large retailers are starting to ask and I’d say they’re best placed to ask those questions of the sector and … we’ll leave it at that.”
Cr Merepeka Raukawa-Tait says she did not know about a “rip off”, but she certainly knew of the regulation she had seen.
“In my household if my power bill is trending upwards then I reduce the use of power.
“I know we can’t go and turn off all the lights in the city but surely we must see that we are making the best use that we can.
“It’s concerning most of us. We just can’t see it going up without making sure we are not using more power than we should – that’s basically why we’re getting charged.”
Thomas says a number of mitigations were in place. At the wastewater plant electricity usage and price was constantly monitored. If usage reached a certain point, the generators could be fired up to be used rather than drawing power from the grid.
Cr Rob Kent says he was pleased to hear where the council was heading with the energy prices.
He says it didn’t take too much intelligence to consider that if the Government was cracking down on offshore exploration then energy prices would continue to increase.