Wellington households could face an increase in electricity bills if a Commerce Commission proposal allowing Wellington Electricity to recover costs for a major Moa Point power upgrade is approved.
The Commerce Commission has released a draft decision proposing to approve Wellington Electricity’s application to recover additional revenue for the project, which is linked to Wellington City Council’s new Sludge Minimisation Facility at Moa Point.
Wellington Electricity estimates the change would add about 10 to 20 cents a month to a typical household electricity bill, or around $2.40 a year.
The upgrade involves improving electricity infrastructure at Moa Point and installing a new cable connection from the Ira Street Zone Substation.
The work is needed to provide a reliable electricity supply for the new Sludge Minimisation Facility while maintaining security of supply for surrounding customers.
Wellington City Council will contribute $8.5 million towards the electricity project through upfront contributions and ongoing payments.
The Commerce Commission said that contribution would reduce the amount ultimately paid by other electricity consumers.
Electricity lines companies cannot automatically pass the cost of unexpected major projects on to customers.
Wellington Electricity was required to apply to the Commerce Commission, which considered whether the project was necessary, whether the costs were prudent and efficient, and whether the company could fund the work within its existing revenue allowance.
The Commission’s draft finding is that the project meets the required regulatory tests.
It is proposing to amend Wellington Electricity’s regulated price path to allow the company to recover additional revenue associated with the upgrade.
The decision is not yet final.
The Commerce Commission is accepting submissions on the draft decision until 5pm on August 31 before making a final determination.
