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Price Rationing Could Help Power Crisis

The most disgraceful part of the way the Government is dealing with the looming hydro power shortage, is the fear of all parties, except ACT, to talk about price rationing for retail consumers, ACT Commerce Spokesman Stephen Franks said.

"The ability of many consumers to cut use quickly, without hardship, was shown dramatically in 1992. And there is no other sensible course. Price caps for business do not save a single bucket of water in the lakes. If we are honest most of us know that with the right incentives we could temporarily save some power without suffering.

"But the retailers in the gun have done virtually nothing to send the signal. During the drawn out Parliamentary urgency debate last week over law that would let the Minister impose a disastrous California style regime, only ACT risked the truth, that a market which doesn't reward consumers for saving scarce power, is no market at all, and the Ministers evasions would only make the shortages worst.

"What about, for example, offering to customers blithely benefiting from their fixed price contracts, a refund or bonus for using say 10% less than they used in the same period last year. The companies could then sell the power released in the spot market, to the businesses in crisis, for enough to cover the costs of the scheme, if the reports are correct of spot prices many times normal rates. Are the companies so poorly managed they cannot work out such a scheme?

"Capping the prices to businesses who have been, until recently using the spot market to get better prices than the fixed price schedules most of us consumers have signed up to, is not needed when the generator price can be determined by the Government's own generators. Silly laws could even make the shortages worse, but the Greens nevertheless supported rules which could keep energy artificially cheap," Stephen Franks said.

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