Govt coffers take precedence over price hikes
Pansy Wong National Energy Spokesperson
12 June 2001
Govt coffers take precedence over electricity price hikes
State-owned enterprises will try to maximise electricity revenue more than ever this winter, National's Energy spokesperson Pansy Wong said today.
"But who can blame them? Only a few weeks back, in last month's Budget, the Government announced a $50 million cash grab from soes. Now we have another cash dividend raid of $100 million from Meridian, and further cash distributions to the Crown to raise soes debt to equity ratio are on the cards.
"Capital intensive projects announced by Meridian and Genesis will have to be financed by either future debts or accumulated profit. All of these measures will put more pressure on electricity prices for households and businesses.
"The Minister of Energy's political interference in pressuring Transpower will increase transmission capacity from North to South in a hurry. But they need to be careful to ensure that the security of supply of the whole transmission system is not compromised.
"Generators such as Meridian - which produces 28% of electricity supply yet has only 6% of the retail customer base - will take the opportunity to expand their share of the retail sector. This will lead to a dominance of state-owned enterprises in both generation and retailing. The Minister's actions need to be watched carefully by both the industry and consumers," Mrs Wong said.