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Labour admits power plan will raise prices

Hon Simon Bridges
Minister of Energy and Resources

19 April 2013 Media Statement
Labour admits power plan will raise prices

Electricity consumers should be under no illusion that the Labour-Greens power plan will hit them in the pocket, says Energy and Resources Minister Simon Bridges.

“Harking back to the 1970s with a half-baked nationalisation plan will ultimately cost consumers as it returns the country to the days of supply constraints, power blackouts and ultimately higher prices.

“David Parker himself said this in advice to the Cabinet in 2006.

“As Minister of Energy he said that “a single buyer would likely result in higher capital and operating costs”. He went on to say that: “The risks involved in changing arrangements could be significant. The resulting uncertainty could lead to investment proposals being put on hold. Direct implementation costs could be large.” And, he admitted that “The single buyer would be relatively poor at sustaining pressure on operational costs.”

“Competition is by far the best tool for delivering electricity at competitive prices,” says Mr Bridges.

“Our 2010 reforms mean that there is more competition amongst generators and retailers than under Labour. We are seeing more innovation and efficiency with 800,000 smart meters operating in New Zealand homes without any need for state intervention.

“Kiwi consumers have the power in their own hands. They are switching in their thousands for a better deal from suppliers and saving hundreds of dollars a year in the process.

“The Labour-Greens policies will actually result in higher prices over time because we’ve seen before that politicians and central bureaucracies do a bad job of setting prices and ensuring supply. Anyone who remembers the power blackouts of the past will know this.

“So does David Parker.”

The relevant Cabinet papers can be found at: http://www.med.govt.nz/sectors-industries/energy/electricity/industry/chronology-of-new-zealand-electricity-reform/electricity-market-review-2006/


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