Rising diesel prices are biting Stewart Island/Rakiura residents in the pocket with power bills set to jump for the second time in less than a year.

Under the current arrangement, Rakiura's electricity grid is powered by five diesel generators at a central power station overseen by the Stewart Island Electrical Supply Authority.

The authority is owned and operated by Southland District Council on behalf of the island’s residents.

On Tuesday, the council moved to increase the price per kilowatt hour by four cents from $0.81 to $0.85, effective March 1.

The bump follows a 25 percent increase last July when prices rose from $0.65 to the current price.

At yesterday’s [Tuesday] meeting, Southland Mayor Rob Scott warned action needed to be taken for alternative methods of powering the island.

In 2021, plans to create a wind farm on Rakiura fell through after an agreement couldn’t be reached with landowners about where to build.

The Government had previously granted more than $3 million from the Provincial Growth Fund to enable pre-development and construction for the project, which would have reduced dependency on diesel.

“It does need to start getting to some actual physical action on the ground, because these (diesel) prices can’t be sustainable for the island,” Scott said.

Councillor Paul Duffy supported the increase, but highlighted concerns about progress for alternatives.

He said he wanted the Stewart Island community to be updated with any progress that was being made.

Councillor Jon Spraggon — an appointee to the Stewart Island/Rakiura Community Board — told Local Democracy Reporting the price rise had not been formally announced to residents on the island, but there had been talk about it in the community.

Spraggon said during the meeting that using diesel reserves to subsidise electricity generation was not an option going forward — a practice that had occurred in previous years.

“Because when something goes wrong, we’re in trouble,” he said.

“In the last month we’ve had two generators cease to operate temporarily.”

The report prepared for council showed staff had recommended to the community board in December that the price be raised to $0.87.

That recommendation was rejected by the board, which pointed to the rising cost of living as reason enough to keep the cost down.

LDR is local body journalism co-funded by RNZ and NZ On Air.