A representative of Rakiura, Stewart Island, warns the remote island could face population decline as residents brace for another potential power price hike.
Just two months after electricity prices on the island rose by nearly 5%, the island’s community board is set to meet this week to consider whether to support another increase.
The current rate sits at $0.89 per kWh—already about twice what urban residents pay.
Work is underway to develop a solar farm, but the island remains entirely dependent on diesel generators for electricity, an arrangement that has become increasingly problematic amid the current fuel crisis.
Southland District councillor and community board appointee Jon Spraggon said even a $0.04 increase could have a noticeable impact on households already on tight budgets, noting it was a “bad time of year” with winter approaching.
Community board members will be given three options at this week’s meeting: take no action, approve an increase to $0.93 per kWh, or support a council-led pricing model that adjusts rates based on the average diesel price over the previous six months.
A graph prepared for the final option showed the kWh rate could rise to $1.20 by Christmas if diesel prices averaged $3.00 over the six months to December.
Spraggon warned that if electricity prices reached that level, it could lead to population decline.
A report prepared for the board shows diesel prices have fluctuated between $1.53 and $3.54 per litre since early March. The most recent price increase, approved by Southland District Council in April, lifted the electricity rate by $0.04 to $0.89 per kWh.
At the same time, the council released $250,000 from reserves to help subsidise rising costs and ease pressure on residents.
In May, soil was turned for a new solar farm, where around 3,000 solar panels are planned for installation.
The government says the project is expected to be completed in early 2027 and could cut diesel use by up to 75%.