More Government = Higher Power Prices

Friday 16 Jul 2004 Ken Shirley Press Releases -- Energy

ACT New Zealand Energy Spokesman today labelled electricity price rises of 10.4 percent over the past year - revealed in data released as part of the consumer price index - the fruits of Labour's increasing government domination and regulation of the electricity sector.

"This is one statistic the Government would rather keep quiet - it shows what Labour's so-called reforms are in fact delivering to consumers: higher power prices," Mr Shirley said.

"These power price rises are a stark contrast to Energy Minister Pete Hodgson's empty promises, as opposition energy spokesman in 1999, that Labour would see household power prices reduced.

"Labour needs to take responsibility for increasing the cost of power - 21.3 percent since it took office - to consumers. This Government has been in power for five years, and can no longer blame previous governments.

"Other factors relating to increased government dominance and regulatory cost include: extra levies to pay for reserve generation capacity, increased regulation and associated compliance costs, and increased State dominance of the retail and generation sector.

"Government-owned power companies account for 65 per cent of the electricity market, and Labour continues to cream large profits and dividends from its SOEs - Mighty River Power, Genesis, and Meridian. In the last financial year, to 30 June 2003:

· Mighty River Power posted its best yet profit of $113.5 million, more than double the $47 million for the year before.

· Meridian Energy posted a full-year profit of $109 million, up $25 million on the previous year.

· Genesis recorded a $61.1 million profit, a jump of 27 percent from the previous year.

"The worst news, however, is that Mr Hodgson has said he thinks electricity prices must rise even further. Clearly Labour's `more government, more regulation' approach is a failure and is adding to peoples' power bills rather than reducing them," Mr Shirley 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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