Electricity prices on 26-27 March tip of the iceberg
new-zealand-labour-party
Fri May 06 2011 12:00:00 GMT+1200 (New Zealand Standard Time)
Electricity prices on 26-27 March tip of the iceberg
Friday, 6 May 2011, 4:46 pm
Press Release: New Zealand Labour Party
David PARKER
Energy Spokesperson
6 May 2011
Shocking electricity prices on 26-27 March tip of the iceberg
Labour’s Energy spokesperson David Parker says the National Government continues to to stand by and allow New Zealanders to be overcharged for their electricity.
“At a time when jobs are scarce, and business and household budgets are tight, a responsible Government would be protecting its citizens from excessive prices,” David Parker said. “Instead yesterday the Energy Minister said in Parliament that she believed electricity prices are fair and properly constrained by adequate competition.
“Today’s events -– where the Electricity Authority pinged Genesis for overcharging --- prove her wrong.
“This latest instance of gouging was patently excessive. It occurred on 26/27 March when Genesis Energy inflated its normal charges of $70 to $80 per MWh to over $20,000 per MWh, charging buyers of its electricity $57 million instead of $250,000 over a mere seven-hour period!
“The extra $57 million was being charged to New Zealand businesses like the Chelsea Sugar refinery and to retailers like Power Shop who try to deliver lower prices to residential consumers,” David Parker said. “This undermines jobs and increases the cost of living.
“This latest overcharge by Genesis, which is chaired by former National PM Jenny Shipley, should be called for what it was --- uncompetitive and greedy. Genesis took advantage of its market power to gouge consumers, at a time when businesses and consumers alike are feeling the pinch of a flat economy.
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“The Government will no doubt argue that cutting back the overcharge on this occasion is enough. Labour says it is not good enough. This event is part of a wider problem, and New Zealanders are still paying excessive prices, which the Government defends and allows to continue,” David Parker said.
“The excessive prices are yet more evidence of how consumers are overcharged for electricity, and it happened because the lack of an effective competitive electricity market means they can do just that.
“The Commerce Commission report (22 May 2009), based on an in-depth study by Professor Frank Wolak of Stanford University, a world authority, found NZ$4.8 billion of overcharging by electricity companies, equivalent to 18 per cent overcharging,” David Parker said. “Since then prices have increased further.”
“The Government allows excessive prices to continue, probably because it wants to maximise the price it would get for the sale of shares in Genesis and other energy SOEs if it is re-elected. This type of Wall Street greed should have no place in New Zealand.
“It is also wrong that the Government and their Authority have cynically chosen to release this decision late on a Friday afternoon in the belief this further evidence that there is not adequate completion in the electricity market will get less attention.
“The Minister admitted in Parliament during question time yesterday that she had met with the head of the Electricity Authority on Wednesday in her office. It is highly likely the timing of this announcement would have been discussed.”
ENDS
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