John Harbord: Major Electricity Users' Group Chair says the rising electricity costs will impact industrial manufacturers more significantly

Households and businesses are set to face higher electricity bills. 

The Commerce Commission estimates the average household's monthly electricity bill will rise by around $10 from April. 

The Commission's allowing Transpower and local lines companies to raise prices as they aim to upgrade and maintain the grid. 

Major Electricity Users' Group Chair John Harbord told Ryan Bridge the impact will be more significant on industrial manufacturers. 

He says those large businesses don't buy their electricity from retailers, so the percentage of their bill that comes from transmission is higher. 

Harbord says many of those businesses are already struggling with costs. 

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Episode Transcript

Speaker 1 (00:00):
Don't look at your power bills for the next few
years people, they're going to get a bit ugly. It's
because the Commerce Commission has given permission to Transpower and
the local lines companies to up their charges. They're doing
this because they need to upgrade the network is weather
issues coming, more of us are using evs and not
enough gas, et cetera, putting more pressure on the network.
John John Harvard is the Major Electricity Users Group chairing,

(00:23):
is with us this morning. John, Good morning, Good morning.
What impact will this, if any, have on business?

Speaker 2 (00:30):
Look, I think it's important to note that the impact
on certainly large sort of industrial manufacturers will be more
significant than what's going to impact households. And that's because
those large businesses don't buy their electricity from retailers, so
the percentage of their bill that comes from transmission and
distribution is higher. So what we're going to see is

(00:51):
those large employers, many of whom are already struggling their
electricity bills are going to go up considerably more than
about the five percent increase that households are looking at.

Speaker 3 (01:01):
What percent are we talking, Well.

Speaker 2 (01:03):
It's going to vary by businesses, so you get some
very large users like the Alu medium smelter at TY
who buy their electricity direct from the national grid. Others
will be going through their lines company, So it varies
by the businesses.

Speaker 3 (01:17):
What's the max.

Speaker 2 (01:20):
Ah, Well, some of them by oh, I think you're
looking at well over fifty percent of their bills for transmission,
transmission and distribution year.

Speaker 3 (01:33):
And they'll be going up by do you know sort
of a range.

Speaker 2 (01:37):
It's very hard to say. The Commission very consciously didn't
provide any estimates, and that's just because of the variability
of the nature of the businesses we're.

Speaker 1 (01:45):
Talking about, right, Okay, do you think it's going to
be enough significant enough to put some of them out
of business?

Speaker 3 (01:50):
We have seen that in the last couple of months
with spot prices.

Speaker 2 (01:55):
Not in and of itself, but it's important to note
and this applies to households as well. It is what
the Commission has approved is just increases in transmission and distribution.
So generators, for instance, are planning to spend billions of
dollars on new generation, which we need, so that price
impact will come through as well, and also any increases

(02:15):
that electricity retailers make, so household bills are going to
go up by more than the ten dollars a month
that the Commission's flag.

Speaker 3 (02:24):
Yeah, interesting, John, thank you very much for that.

Speaker 1 (02:26):
Appreciate your time, John Harvard, Major Electricity Users Group there
saying that as a percentage, big businesses, big news is
will pay more because they pay more for the transmission
as a percentage of their outgoings. Just so that you know,
for consumers, it's approximately ten dollars a month for one
hundred and twenty dollars annually for the first year, and
then it is five dollars a month or fifty five
dollars annually for it for the year, every every for

(02:51):
the next four years, I should say, and that would
bring your title to around three hundred and forty dollars
per year extra on your power bills within five years.
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