Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Labour-Greens to rip up the book on electricity pricing

Labour-Greens to rip up the book on electricity pricing

By Pattrick Smellie

April 18 (BusinessDesk) - The Labour and Green parties have promised to rip up the existing electricity market model, returning to a centrally planned electricity system, a single state-owned power buyer, and breaking up the integrated generator-retailer electricity companies.

Announced on the eve of the partial privatisation of state-owned MightyRiverPower, the announcements have a triple political purpose: to show a united Labour-Green front, a politically powerful offer to cut power prices, and to put a further spoke into the MRP float.

If implemented, there would be a $500 million to $700 million hit to electricity company revenues, said Labour leader David Shearer, who said the policy timing was not deliberately aimed at the MRP sale.

That would flow to savings for households of between $230 million and $330 million and promote the creation of as many as 5,000 new jobs and $450 million a year of additional activity, because of the competitive advantage and increased household buying power created by lower prices, a study for Labour by the BERL consultancy says.

Shearer and Green Party co-leader Russel Norman said the two parties had only realised late in the piece that both parties were both announcing new electricity policies and that the two should be merged.

The MRP prospectus warns would-be investors that regulatory change is a source of risk.

Key to the proposals is the creation of a central buying and electricity system planning agency, dubbed NZ Power, which would drive down power prices because of its market power and would not be required to make a profit.

It would also be the market regulator.

"It will not just supervise the market, it will be actively involved," said Labour's finance spokesman David Parker, a Minister of Energy in the 1999 to 2008 Labour-led administration.

It would tender for new electricity generation, or potentially energy efficiency measures, rather than the current crop of generators competing to identify the next least costly unit of new generation when demand rises.

In some cases, industrial users would be able to contract directly with NZ Power.

Power prices would be set not by reference to the cost of the next new unit of generation, but by average costs that include the anticipated price of new generation. However, there would still be a traded market in wholesale electricity, which could reflect regional variations.

Asked by journalists what signal investors should take from such a substantial proposed intervention, Shearer said "where markets are not competitive and not working, the government will look to see how it can ameliorate the system."

Labour's affordable housing initiative was another such example, while Parker cited Labour's intervention to drive down telecommunications service prices during its last period in office.

Parker said while elements of competition had improved, it would never be possible to eliminate what Labour and the Greens are calling "super-profits" made by power companies over the last 14 years or so.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Banking: Westpac NZ Lowers Merchant Fees For Small Businesses

Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers. On 1 September, most ... More>>

REINZ: Million Dollar Plus Property Sales Increase 11.7% Nationally

The number of properties sold around the country for one million dollars or more during the first half (H1) of 2020 increased by 11.7% compared to H1 2019, with 5,426 million-dollar plus properties sold (up from 4,858 in H1 2019) according to the Real ... More>>

Waste: Government To Regulate Plastic Packaging, Tyres, E-Waste

The Government is stepping up action to deal with environmentally harmful products – including plastic packaging, tyres and e-waste – before they become waste. As part of the wider plan to reduce the amount of rubbish ending up in landfills, ... More>>

ALSO:

Bankers Association: Banking Becomes First Living Wage Accredited Industry

Banking has become New Zealand’s first fully living wage accredited industry, leading to nearly 1800 employees and contractors moving onto the living wage and gaining greater economic independence for them and their families. As of today, all ... More>>

ALSO:

Economy: Funding For 85% Of NZ Not-For-Profit Entities Impacted By COVID-19

Results of a recent Institute of Directors poll show that 85% of board members on not-for-profit organisations say COVID-19 has moderately or significantly affected their funding. The ‘pulse check’ conducted in the first two weeks of July looked ... More>>

Volcano Detection: Eruption Alert System Would Have Given 16 Hours’ Warning At Whakaari

An alert system that could have given 16 hours’ warning of last year’s eruption at Whakaari/White Island is ready for deployment, University of Auckland scientists say, with warning systems for Ruapehu and Tongariro the next priority. ... More>>


Property: Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index. Trade Me Property spokesperson Aaron Clancy said ... More>>

Seismology: The Quiet Earth

As many daily activities came to a halt during lockdown, the Earth itself became quiet, probably quieter than it has been since humans developed the technology to listen in. Seismologists have analysed datasets from more than 300 international ... More>>

RNZ: James Shaw Says Kiwibank, Not Ministers Should Decide On Investors

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one. More>>

ALSO:

FMA: Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments

Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually ... More>>

FIRST Union: Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off

(FIRST Union comments on The Warehouse consultation and proposed restructure) 'Unfortunately the Warehouse have done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs ... More>>

ALSO:

Stats NZ: Mixed Performance By Regions Leaves National Emissions Picture Unchanged

Approximately two-thirds of New Zealand’s regions recorded decreases in their total greenhouse gas emissions, while one-third of regions saw increases between 2007 and 2018, Stats NZ said today. “While some regions reduced their emissions, ... More>>

RNZ: Economic Activity And Business Confidence Bouncing Back

Two surveys from ANZ show business confidence and economic activity have rebounded, but uncertainty about the future remains extreme. More>>

ALSO: