Most Dunedin electricity users will be hit with a double-whammy price increase of more than 9% as the city slips further into winter.
Contact Energy confirmed it will charge its Dunedin customers 6% more for their power from the start of next month, and all of its New Zealand customers another 3.2% to meet the impact of the emissions trading scheme (ETS).
The 6% increase means someone using 8000 kilowatt hours of electricity a year will pay about $9.50 more a month - or about $114 more a year.
The ETS increase will cost that average consumer another $62 a year.
Company spokeswoman Louise Griffin said the ETS increase reflected the $25/tonne cost of carbon, while the Dunedin-specific adjustment reflected the increasing cost of generation and supply.
It was the first change to city rates since November 2008.
Contact was selling in a competitive market - six electricity retailers supply Dunedin - but it could not hold prices at their present level.
"We appreciate that price rises are never popular, and it is certainly not something that is done lightly," she said.
Ministry of Economic Development figures show Contact supplies electricity to 47% of the city's 52,364 electricity connections.
A ministry survey also shows Contact had the most expensive average electricity price in Dunedin for the May quarter, and that its low-user tariff was the most expensive.
Contact managing director David Baldwin said in February that wholesale and retail prices did not reflect the true cost of energy, and that rates had to rise.
At the same time, some electricity companies warned the ETS, which imposes costs on all electricity and gas production that emit greenhouse gases, would push prices up.
TrustPower spokesman Graeme Purches said it was inevitable the ETS would affect wholesale power prices and, by extension, residential prices.
His company would spend the next few months assessing the impact of the scheme before considering any ETS-prompted price change.
Prices were last adjusted in October last year.
The next annual adjustment was likely to be in the 3%-4% range, Mr Purches said.
Meridian Energy has also adopted a wait-and-see approach to the ETS.
Spokeswoman Claire Shaw said it last adjusted average Dunedin prices by 5% in March 2009, and had no date for another review.
Genesis Energy spokesman Richard Gordon said his company had no immediate plans to increase charges anywhere in the South Island.
They were last reviewed in February - some prices dropped while all others remained unchanged - and were "locked in" at those levels until July next year.
Like TrustPower, Genesis would assess the "true cost" of the ETS before deciding whether it should affect prices.
At this stage, it did not believe it should be tackled as a "straight forward levy pass-through" to consumers.
Mercury Energy increased prices in April before announcing a 3.3% ETS increase in May.
Spokeswoman Marie Hosking was surprised by the scale of Contact's cumulative increase.
News of the hike prompted Energy Minister Gerry Brownlee to encourage consumers to shop around for the best power deals.
The Electricity Industry Bill before Parliament would constrain future increases and "smooth out" steep prices
How they compare
Contact Energy: All day economy (low user): $1762.
TrustPower: All inclusive (low use) friends: $1650.
Meridian Energy: Meridian low user economy 24 (controlled hot water): $1638.
Mercury Energy: Low user inclusive: $1622.
Genesis Energy: Household composite: $1595.
Powershop: All inclusive (default tariff, with conditions): $1587.
Genesis Energy: Classic composite: $1574.
Prices from www.consumer.org.nz.
Each is the cheapest listed alternative to Contact's all day economy (low user) plan.
Calculated for the year to June assuming a household of 3-4 people with at least one person at home all day; electric hot-water heating; a heatpump supplemented by a woodburner; an electric cooker, and using 8000kWh of electricity.
