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No savings with power switching

David Shearer
Energy Spokesperson

4 April 2014

No savings with power switching

A report has dismissed the government’s grand claims that customers who switch power companies have brought big savings to the electricity market, says Labour’s Energy spokesperson David Shearer.

“This is a blow to the government which has actively touted the benefits of a switching facility that would bring a competitive market that in turn would deliver lower prices.

“The Covec report, commissioned by the Ministry of Business and Innovation and Employment showed that the $15 million the government has put into electricity switching has had no impact on overall electricity prices, nor has it increased competition between power companies.

“Despite investing $15 million into switching, the estimated 62,000 to 79,000 consumers who used the facility saved just over $16 million.

“Spending $15 million to help some electricity consumers save just $16 million is hardly worthwhile. Taxpayers are effectively subsidising those who changed.

“Meanwhile underlying electricity prices have increased four times the rate of inflation in the past year.

“The electricity system is not working. Demand is declining while there is an abundance of supply. If the market was truly competitive, prices would be coming down, not going up. The Government is out of touch with how New Zealanders feel about increasing power bills,” said David Shearer.

ENDS

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