The report says much of the issue with TLC’s load controlling activity arises from the fact that their peak demand prices are loosely linked to their use of load control.

“TLC uses load control more than the other distributors we canvassed, and they only set their peak demand charges when load controlling occurs. This link between load controlling and pricing—and consumer uncertainty about when TLC’s charges apply to them—means many consumers have struggled to understand TLC’s pricing and are making “bad” investment decisions as a result,” says Electricity Authority Chief Executive Carl Hansen.

“The use of load control is consistent with the current transmission pricing regime which encourages TLC to reduce transmission charges by reducing demand on the network when TLC thinks it may be charged transmission charges.”

The report says while TLC’s pricing system has not negatively impacted retail competition or system reliability it has caused consumers stress and uncertainty.

“It turns out this is a case where uncertainty from one source is compounding uncertainty from another source, causing a great deal of unnecessary anxiety for many TLC’s customers.”

Mr Hansen said the Authority noted TLC had completed its own review into its pricing structure.

“There have been a number of changes at TLC since we conducted our review and we note they are now undertaking a consultation process with their consumers about proposed changes, which include moving to a time-of-use based pricing structure.

“We welcome TLC’s efforts to resolve its issues with its customers.”

For more information:

Amanda King 
Communications Manager
Mob:+64 21 321 831
Email: amanda.king@ea.govt.nz