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Spot price rort nets Govt generators huge windfall

Media statement Thursday, July 13th, 2006

Electricity spot price rort nets Government generators huge windfall

Spot market prices to be charged for power for last month will leave no one in any doubt about the silliness of New Zealand’s electricity market system.

For June 19th the spot price of power between 5pm and 6 pm is to be charged at $10,000 per MWh whereas the usual price is about $65 MWh.

“This is bizarre,” said Alasdair Thompson, chief executive of the Employers and Manufacturers Association (Northern)

“Apparently the theoretical model used by the electricity system operator determined this outrageous spot price.

“Any business exposed to the spot price at that time will be paying through the nose! It’s a rort, pure and simple.

“The mistake in the model will cost New Zealand businesses $30 million extra!

“The money goes straight into the pockets of the Government-owned retailers and generators.

“Apparently, a flaw in the model occurred, and under the rules set by Government, the Electricity Commission has no choice but to accept the price set by the model.

“The madness has to stop.”

ENDS

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