NZ Power: New Labour-Green Electricity Proposal
Labour-Green Party Joint Press Conference - 18 April 2013
The Scoop Team
Today Labour and the Greens unveiled a joint proposal to for electricity market regulation.
Labour's and the Greens' proposal involves the creation of a single buyer agency called NZ Power, which will purchase all electricity at a price based on the cost of production.
David Parker opined that currently markets are not truly competitive, meaning that major players can set very high prices for consumers. Electricity was centrally run up until 1987, when the state monopoly was divided up to create commercial competition, and residential prices have continuously risen ever since while commercial prices have fallen. The gap between residential and industrial prices in New Zealand is currently the second largest in the OECD.
Under the NZ Power setup, Labour estimates that power bills will fall by $230-$330 per annum for the average residential customer. The estimated economic boost would be around $450 million, creating around 5,000 jobs. Government oversight would also increase the likelihood of energy efficient electricity sourcing.
Both parties denied the release of the NZ Power proposal is related to the Mighty River Power sale. However, Labour and the Greens' show of support for the residential consumer's rights may push National into the politically unpopular position of defending comparatively wealthy electricity shareholders. In light of Simon Bridges' statement on how the NZ Power proposal is reminiscent of Soviet communism, it is unlikely that National will be convinced to support it. The scheme will most likely only be enacted if Labour and the Greens are elected next year, by which time the major power companies will be sold off, making efficiency and oversight more difficult.
Neither Labour nor the Greens have any plans to nationalise power companies.