-
Source: Reuters -
Watch Video
-
Related
The Reserve Bank has told electricity retailers to ensure any future price hikes are justified.
Some companies have already put their prices up this year, including Genesis Energy by 8.4% in some areas, and Trust Power and Contract by about 5%.
Prices rises are likely to be unavoidable thanks to the emissions trading scheme and a possible GST increase later this year.
But Reserve Bank Governor Allan Bollard has told power companies that unnecessary increases could hurt the economy.
"If they think they're in a market position where they can push up prices at the minute, that could come at a cost to the New Zealand economy," he says.
Bollard's stance has got support from the government.
"(The electricity retailers) have some responsibility. Many of them are state-owned and they do need to consider very carefully the sort of pressure they create in the economy," says Energy Minister Gerry Brownlee.
The electricity industry has already been warned after a government review in 2009 accused it of excessive pricing.
"The government is very unhappy with the way electricity has been marketed over the past decade or so, that we are not going to be happy to see the sort of price rises that we saw over that period of time," says Brownlee.
