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Misleading claims that high electricity prices are fine

Press release, 13 June 2012: Molly Melhuish, independent energy analyst

Electricity Authority: misleading claims that high electricity prices are fine

The Electricity Authority told its stakeholders a week ago: "High prices are fine so long as they promote efficiency." They only released that statement yesterday, two days before the second reading of the bill to privatise the power companies.

"Only an expert would realise", said Molly Melhuish, independent energy analyst, "that the Authority contradicted itself in slide 20 in the same presentation."

The high prices described at the beginning of their presentation are to support building of cheap power stations like Whirinaki, designed only to be run in an emergency. But New Zealand has already built 63% more electricity capacity than needed to meet peak demand efficiently - and most of these are expensive geothermal power stations that run all the time.

"My analysis, widely distributed last week, shows why household power prices are rising, said Mrs Melhuish.

"I discussed this with the Electricity Authority last week. Prices are rising so electricity development can stimulate economic growth, not to provide an affordable essential service."

"The Authority's Electricity Markets manager, John Rampton, responded with seven instances where he claimed I was factually incorrect," said Mrs Melhuish.

"But when I was able to discuss it with him, he acknowledged that our differences were mainly in perspective rather than fact - 'I see where you're coming from', he told me," Mrs Melhuish said.

"Until the Electricity Authority allows expert participation from a domestic consumer perspective, in all its regulatory processes, our prices will continue to rise, so New Zealand must not privatise any electricity companies," said Mrs Melhuish in conclusion.


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