David
SHEARER
Energy Spokesperson
10 February 2014 MEDIA STATEMENT
Nothing can mask the fact that power prices are too high

Today’s report commissioned by Business New Zealand cannot hide the unpalatable truth that New Zealand power prices are too high, says Labour’s Energy spokesperson David Shearer.

“No matter how much the report from Sapere tries to justify the current electricity pricing model, it is clear we must have substantial change.

“The inescapable effect is that electricity demand is declining yet prices are still going up, hurting New Zealand families. That tells me and the rest of New Zealand that the market is failing. All the reports in the world will not change that fact.

“In addition what must be galling for Business New Zealand’s members that Business New Zealand is advocating higher electricity prices when they could be receiving substantially lower prices.

“This report and last week’s bizarre model from the Electricity Authority, trying to use construction costs a hundred years old to justify high prices, show how desperate the industry is to cling to the current pricing model regardless of how it hurts consumers.

“The issue is what power companies paid for those hydro stations, and no amount of spin can change that.

“Even Business New Zealand’s own report admits: ‘Increases in retail electricity prices over the past decade have not been well explained nor justified. The relationship between costs, wholesale electricity prices, and retail prices is not well understood and retail margins … remain opaque.’

”Our hydroelectricity has some of the lowest operating costs in the world but generators are profiting by overcharging New Zealanders for the value of our public water. They receive the same price when they sell on the wholesale market as more expensive forms of power generation.

“Labour’s policy will stop the effective privatisation of the public rivers, which allows the value of our low cost hydro power to be captured by the power companies rather than passed on to our businesses and households.

“Labour’s NZ Power will reduce household electricity bills by hundreds of dollars a year and it will lower prices for businesses by 5-7%.”

ENDS

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