Saved Power, Wasted Opportunities

Monday 24 Mar 2003 Stephen Franks Press Releases -- Commerce

ACT SOE Spokesman Stephen Franks was incredulous today at Meridian Energy's huge hydro-generation investment in Australia.

"Why, when New Zealand is staring at developing electricity brown-outs, and industry losing millions per week from high spot prices and looming shortages, is the New Zealand Government investing $650 million in Australia's electricity generation?" Mr Franks said.

"Does the Minister buy Meridian's incredible story, that spending money on Australian dams somehow makes Meridian better able to build wind farms in New Zealand? How? Or is this a story the Minister told Meridian to tell - to bamboozle the public into thinking there was some arcane commercial mystery justifying this spending, some synergy that no one had ever before identified?

"How has the Government made sure, as shareholder, that this is not another Ansett-type punt in Australia? What does a New Zealand Government company know that the commercial bidders don't, to allow Meridian to pay more than any of them?

"If the Government thinks it must own generation assets, as it claims, it must intend doing something with them that a private owner would not. Only that would make the investment `strategic' - to use the Government's favourite justification for plunging taxpayer money into new commercial enterprises.

"The Minister has power under the SOE Act to tell Meridian what its mission must include, and he may contract with Meridian transparently to pioneer pricing strategies that would reward consumers who conserve energy.

"It is looking increasingly as though nothing but price signals to consumers - who use 65 percent of our electricity - will get us through the looming brownouts. Meridian should be offering consumers contracts, letting them `sell' the power they save to businesses being exploited by high spot prices.

"But, instead of insisting on such innovation here, the Minister uses his `strategic asset' to supply power in Australia. What strategy? Is it to ensure there is enough power in Australia for New Zealand jobs and businesses that have to export themselves?" Mr Franks said.

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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