Generators Reap Huge Windfall From Electricity Crisis

National's Finance spokesman Bill English has today released evidence that Government-owned electricity generators are reaping "extremely large profits" from the current electricity crisis.

"Figures which I have obtained show that transactions on the New Zealand Electricity Market stand to be worth around $900 million dollars more this year than they were last year, due to the electricity crisis. A significant majority of that money, which is being ripped out of the pockets of businesses, will end up in the Government's coffers.

"This is likely to be offset with hedging contracts, the value of which the Government is not revealing, but it still indicates a huge windfall.

"The value of transactions in May was 219% higher than for the same month last year, in June they were 325% higher, and the estimate for July - which won't be finalised until invoices are completed three weeks from now - is a 687% increase on last year.

"In July last year transactions on the electricity market were worth $89 million, in July this year that leapt to an estimated $700 million. The average price for a kilowatt-hour of electricity in July 2000 was less than 3 cents. This July that leapt over 700% to 23.7 cents per kilowatt-hour.

"This represents a huge and devastating drag on businesses. If a small business was buying electricity on the spot market in July, which normally cost it $5,000 a month, they will receive a bill on August 20th of up to $35,000.

"The Government is being disingenuous in its attempts to downplay the amount of profit it stands to make from this electricity crisis. Labour is profiteering, pure and simple, in order to reap what is effectively a tax grab off business to help pay for Dr Cullen's super scheme," Bill English said.

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