No Confidence in the Electricity Market

29 March 2011

Grey Power has no confidence in the electricity market. It allows generators to hike spot prices without restraint, whenever they have market power.

Today’s revelation that spot prices reached $20.00 per kilowatt-hour during seven hours on March 26 is further proof that the market has failed. The Electricity Authority may decide to suspend the market for those hours – but what then is the point of a market?

Already in three weeks in December, manipulation of hydro offers led to excess profits of $48 million. The Authority said those profits were justified, in view of the risk of hydro shortage this winter. Yeah, right!

High spot prices lead to retail price increases – and retail electricity prices increased sharply in 2010.

Domestic consumers are already facing price hikes for food, medical bills, housing. Grey Power members face unaffordable power bills this coming winter.

We call on Government to direct the Electricity Authority to stop this profiteering through market power.

Any profits gained by State Owned Enterprises through unreasonable market behaviour should be kept in the public purse, and used to alleviate the hardship it is causing.

ENDS

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