5 Feb 2014

Power companies 'absorbed' rising costs

8:17 pm on 5 February 2014

The Electricity Authority says power companies have been absorbing rising costs over the last three years, rather than passing it on fully to customers.

New analysis by the authority shows electricity retailers costs increased 21.5 percent over the last three years, whereas prices charged to customers over the same period went up by 12.5 percent.

Authority chief executive Carl Hansen says this shows competition is forcing electricity retailers to absorb some of the cost increases.

He says the cost increase has been greater than the retail price increases which is consistent with a more competitive market.

Mr Hansen says people's perceptions can be informed by their individual circumstances which is why the Electricity Authority has released this research to inform the market and inform consumers about what is going on.

He says the research was undertaken by the New Zealand Institute of Economic Research (NZIER) so is independently validated and put together.