Vector has today announced it will pass Loss Rental Rebate (LRR) surpluses directly to Auckland electricity account holders as an annual payment, with the first payment of around $30 set to arrive later this year.
Account holders in Auckland’s Entrust district will receive the LRR payment in September as part of their annual Entrust dividend payment. Account holders on the Northern network will receive the payment in August via cheque.
LRRs are the surplus created once the costs in New Zealand’s electricity wholesale market have been worked out.
The surplus is the difference between the price and quantity of electricity generated and the price and quantity of electricity received, creating a difference in cost, which is only known later on.
In Vector’s case, this surplus is received as a credit note from Transpower.
For many years Vector has passed the surplus directly to power retailers, with the expectation that the benefits are then passed to Auckland account holders only.
Vector CEO Simon Mackenzie said the change is designed to allow greater transparency in the way LRR surpluses are distributed.
“While historically Vector has provided LRRs to retailers, our concern has been that for retailers whose customer base extends beyond the Auckland area, it is difficult to ensure that the rebates are returned solely to Auckland customers.
“Aucklanders are entitled to this payment, and therefore we’re introducing a new and fairer process that simply makes allocating the surplus clearer and more straightforward,” he said.
This week, Aucklanders with an electricity account on Vector’s network will be notified that the LRR payment is coming their way later this year, and any subsequent years where LRR surpluses are created.
“While the amount will vary year to year depending on the surplus generated, this year’s payment will be around $30, which will no doubt be a welcome boost for many Auckland households at a time of year when electricity expenses are typically high,” Simon said.
For more information see vector.co.nz/powerpayment