On page 34 of the first link (actual page number xxxiii), there is a nice graph showing before and after annual transmission charging. Meridian is the most affected, with a reduction from around $95m to approx $40m. Will allow them to compete more aggressively if that occurs. As expected, NZAS charges also reduce, which increases their chances of staying around. Aucklanders (via Vector) get hammered.
(Haven't read any of it. Just looked at the pretty pictures in isolation. Conclusions may be wrong).
A bit of a naive view I know but I though network costs were pass through cost to the consumer. And given the charges apply equally to each property regardless of retailer, then its not as if any retailer gets an advantage out of this. The benefit/detriment of this is born by the consumer isn't it? Or is this because prices rise when costs increase but for some reason, don't seem to reduce when costs reduce, even though we are meant to be a fully competitive market economy.
I think that is true overall. But consider Meridian selling into Auckland as an example, with reference to the graph I previously mentioned. All the retailers will be passing through the higher vector transmission costs to the end consumer, but Meridian's generation related transmission costs are lowering considerably relative to the other gentailers. The large majority of those lower costs I expect will also be passed through, and in doing so Meridian will be able to offer a more competitive package without impacting their profitability. You would hope that will translate into additional subscriber numbers, and they may also keep a little of the savings for themselves.
Last edited by cyclist; 17-05-2016 at 03:04 PM.
Reason: Vector's tramission costs, rather than distribution
Maybe it will give the market some certainty over the future of Tiwai Aluminium Smelter.
One of the biggest beneficiaries of the overhaul would be Rio Tinto's Tiwai Point aluminium smelter in Southland, with annual charges projected to drop by $21 million. From Stuff Business... http://www.stuff.co.nz/business/mone...ld-power-bills
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Originally Posted by bull....
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