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Government getting lion's share of crisis windfall

Tony Ryall National Commerce Spokesman

Pansy Wong National Energy Spokesperson

16 August 2001

Government getting lion's share of electricity crisis windfall profits

National MPs Tony Ryall and Pansy Wong say the Government is going to desperate lengths to conceal the fact that State-Owned companies will get the lion's share of the enormous profits created by the electricity crisis. Over $1billion extra has been paid for electricity since 1 June 2001.

"In Parliament today we were forced to sit through a farce after SOE Minister Mark Burton stole himself away from Parliament to avoid facing scrutiny on the degree to which the Government is profiting from the crisis," Mr Ryall said.

"The facts prove conclusively that Government owned companies dominate electricity generation, the national grid, the wholesale market and the retail market.

"In terms of electricity generation, companies owned by the Government control 62% of the market - with Meridian Energy having a 32% share, Genesis Power a 17% share and Mighty River Power a 13% market share.

"The lines companies are the only sector the Government doesn't dominate. Those companies are unregulated monopolies due to Labour having voted down National's price control bill in 1999. Those monopoly companies have profited by at least $200 million so far as a result of Labour blocking that legislation.

"In terms of the retail market, the companies which sell electricity to most households and businesses, the Government is creaming the profit, with a 57% share of the market. Genesis Energy controls 26%, Meridian Energy 12%, Mercury Energy 17% and First Electric 2%. Those are all State-Owned companies, and they are bleeding their customers dry while the Government ducks questions about the real size of the profits.

"While people shiver in their homes trying to save power, Government Ministers are sleeping snug and warm, safe in the knowledge that their State-Owned companies dominate the industry, and are raking in windfall profits created by this power crisis.

"People have vented their fury at seemingly faceless electricity companies, but those companies do have a face - and it is the Government's. Every time people see Pete Hodgson on those holier-than-thou TV ads for conserving power, they should remember that his Government is raking in enormous profits as a result of this power crisis," Tony Ryall and Pansy Wong said.

Ends

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