Labour welcomes Commerce Commission report on energy sector

The report of the Commerce Commission into the pricing behaviour of the New Zealand power generation sector has been welcomed by Labour, Finance and Energy Spokespeople David Cunliffe and Charles Chauvel say.

“This report was commissioned under the last Labour Government because of increasing concerns surrounding the structure of the sector and the impact this was having on Kiwis,” Charles Chauvel said.

“While the report has found that the companies did nothing illegal, the negative impact of their market dominance allowed them to behave in a manner unacceptable to most New Zealanders.

“The National Government has previously signalled that it expects power companies to increase the dividend they pay. The only real way for the power companies to achieve this is to further increase electricity prices. The report shows why this would be a terrible idea," Charles Chauvel said.

"The impacts on ordinary New Zealanders if the Government fails to recognise the need for reform or worse continues to demand higher dividends will be devastating,” David Cunliffe said.

“As winter bites many Kiwis will be thinking long and hard before they turn the heater on because of high power prices and this situation should not be allowed to continue. Kiwis families must come before Government dividends and reform must be a priority,” David Cunliffe said.

“There are serious flaws in the Bradford model under which the electricity market currently operates. Today’s report, although overdue, reveals more of these flaws. But the solution is not simply more competition, as advocated by big business,” Charles Chauvel said.

“Instead, careful thought about the structure and regulation of the sector is required so that it delivers sustainability, security of supply, and affordability to all New Zealanders,” Charles Chauvel said.

The Government needs to give New Zealanders an opportunity to have their say on solutions by having open and transparent consultation on the structural changes that are clearly needed,” David Cunliffe said.

ENDS

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