Buller Electricity says the transmission cost rise will mean customers face increases of at least 20 percent. Photo: RNZ / Rebekah Parsons-King
One of the country's smallest electricity lines companies is going to court to challenge a fourfold increase in transmission costs, which it says will damage the region economically.
Buller Electricity has filed for a judicial review after being told by national grid operator Transpower its transmission charges will rise 427 percent from April.
The company said it has around 4850 residential and business customers and they face rises of at least 20 percent.
The increase is part of the price resetting done by Transpower and the Electricity Authority to cover the cost of running and developing the national power grid.
The chair of the trust which owns Buller Electricity, Jan Coll, said the price rise was unreasonable and would have seriously adverse effects on the regional economy.
"It is a highly unfortunate and unreasonable decision by government agencies to impose extraordinary cost increases on a region that is already struggling economically and on a community that has been hit hard in recent times and has relied on emergency government funding to help it through."
A director of the lines company, Shannon Hollis, said said legal action was its last option.
"It is unfortunate that it requires court proceedings, but we have no other avenues. Transpower has made clear it is unwilling to reconsider its approach, which means legal action is the only step left open."
She said a price increase of such a size could not be absorbed by Buller Electricity and its future would be seriously jeopardised if the full increase was imposed.
A Transpower spokesperson said as the matter was now before the court, their ability to comment was limited.
"Transpower stands by the decisions made regarding the reclassification of some of Buller Electricity's assets in accordance with the Electricity Authority's new TPM," the spokesperson said.
"We welcomed independent expert review of our decision, but Buller have decided to seek judicial review instead and we respect its right to do so."
The Electricity Authority has been approached for comment.
