While Hodgson admits new generation facilities will be more expensive than existing plant, he cautions retail companies against any "overshooting".

"As prices go up so that new generation will be built, let us make sure that companies don't have prices going higher than they need to," he told National Radio today.

He did not believe that had yet happened, but said he would investigate if there was another round of significant price increases for residential and small business consumers.

Yesterday EnergyReview.Net reported that the hundreds of thousands of Kiwis who faced power hikes in the second half of 2003 are about to be hit by the next raft of increased charges.

Contact Energy subsidiary EmPower is hiking charges by an average of 15% for its residential and business customers on Auckland's North Shore from next month, while TrustPower is raising prices in Central Otago for about 20,000 residential customers by about 7%.

Genesis, Mercury Energy, Meridian Energy - which all hiked power prices last year - say they have no immediate plans to further increase their prices, but warn it is inevitable higher costs will flow through to consumers.

The major generators/retailers are saying the reasons for the price hikes are the wind down of cheap Maui gas, continued economic and population growth, and the nation's seemingly ever-increasing demand for electricity.

TrustPower spokesman Graeme Purches told ERN from Tauranga today that he believed the steadily increasing wholesale price of electricity should "plateau" within the next few years as dearer new generation came onstream and consumers paid correspondingly higher prices.

"We have to remember that it's not just generators increasing prices, but (national grid operator) Transpower and lines companies; and the Ministry of Economic Development still says we have the third lowest electricity prices in the OECD," he told ERN.

Purches disputed claims by Electricity Networks Association chief executive Alan Jenkins who yesterday told ERN it was ridiculous generators/retailers could "budget" future higher costs into their pricing methodology before new plant was even built.

"That's stupid; no significant new generation was built for a number of years because power companies would not have got a satisfactory return on their investment. However, with prices increasing, TrustPower and other power companies are now looking at new generation," Purches said.

TrustPower was doubling the size of its wind farm on the Tararua Ranges and was looking at other wind and hydro opportunities.