Bum deal for power consumers

A damning report from Consumer New Zealand confirms what consumers already know, that they’re getting a bum deal, says Labour’s Energy Spokesperson, David Shearer.

“As winter sets in and consumers’ power bills go through the roof, it will be cold comfort to know that power companies have been making colossal earnings.

“The Consumer report says that between 2010 and 2013, Genesis’s pre-tax earnings went up 35 per cent, Contact’s earnings went up 27 per cent and Mighty River Power went up 19 per cent.

“Kiwis are paying through the nose for energy. It is particularly galling to see those increases coming during a recession.

“The respected, independent authority on consumer issues notes that despite over two decades of market reform of the electricity sector, ‘consumers are yet to get reliable assurances that the market model is supplying electricity at a reasonable price’.

“As Consumer New Zealand says, ‘that consumers might reasonably expect a drop in price ‘in a genuinely competitive market when demand is flat and wholesale electricity rates have fallen.’

“In the meantime John Key and Simon Bridges continue to insist the electricity market is working and power prices are not too high. The Government refuses to recognise a problem, and has failed to stand by Kiwis who are paying too much for power, says David Shearer.

The report also notes that electricity still remains in the hands of five big players controlling 93% of the market. Inroads by smaller players haven’t been able to hold prices let alone bring them down.

“According to Consumer, ‘the legislation has failed to ensure adequate price transparency, leaving regulators struggling to gauge whether prices are fair.’”

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