Fisking electricity price claims agains

I do wish there would be more scrutiny of claimed increases in electricity prices. The data I consistently use to measure the impact of electricity on the average household is the Stats NZ Consumers Price Index, electricity class.

Now 3 News reports:

But at the same time, Labour and the Greens took the opportunity to release data showing electricity profits continue to increase, and 400 households each day are now having their power disconnected because bills are not being paid.

Dunedin pensioner Rosemary Dorey describes her latest power bill as “a horrible surprise”.

She is tempted to turn her heaters off to save money. 

“It’s very tough when they get to nearly $300 a month,” she says. “That’s quite a lot when you’re on a pension.”

So why is electricity getting more expensive, when new figures show electricity demand has actually dropped in the past five years, down 1.6 percent? Over that time, the price of electricity has gone up nearly 30 percent.

30% sounded too high to me. Usually the opposition are referring to price increases since the election. In December 2008 the electricity CPI was 1175 and today it is 1404 – that is a 19.5% increase over four and a half years or around 4.3% a year.

Note that includes the GST increase (which had tax cuts to compensate for it) but also the introduction of the Emissions Trading Scheme which imposed an external cost on some electricity. Labour and Greens are proposing to double the cost of the ETS on the electricity sector incidentally.