Gerry Brownlee has announced changes to the electricity sector. National are returning to their ‘market knows best’ ideological roots. They’re gutting the Electricity Commission, forcing asset swaps on the SOE generators that will do little to promote effective competition in the electricity market, and doing a bit of window dressing about customer switching beween retailers.
Before the election Brownlee and Key were blustering about electricity prices being too high. Now they seem content to talk about limiting price increases. After their year long review they have done nothing that will help to cut power bills for hard working Kiwi families. In fact their demand that the SOEs return even bigger dividends to the government could send power prices up even further.
I’m still working my way through the reports and will blog more on the detail in due course. Suffice to say I’m disappointed the government have once again ducked taking the tough decisions.
Great just what we need more expensive power.
No matter how ineffectual these changes will be, National in there first year in power has done more than Labour did in nine
Gerry Brownlee helps deliver bigger power bills to citizens under the guise of so-called reforms ? Not exactly a nice Chrissy pressy
@Robb, it’s about quality not quantity… NZ is still the same country it was under labour, power prices are still rising, people are still on the doll, exporters are still getting punished by the exchange rate and life is no better for the average kiwi so National hasn’t really done anything good. If Labour’s 9 years are so bad then it should be easy to do much better but I havn’t seen any progress.
So Chris – please explain how the massive rises in power prices during the Clark years were a reflection of a controlled “government knows best” and how that benefited the consumer.
Add in the costs of the global warming nonsense and increases in demand (but no new generation) and we start to understand why the market is a necessary tool.
@ n0exit – with the kind of changes and at the rate things are going, the present Government is not making things any easier for households to cope with rising bills and is driving NZ down the path of increasing income/wealth gap and social disparities, and creating a broader and deeper underclass of citizens.
Excuse me for being a pedant, but “hard-working” should be hyphenated.
@Gary Jones, I agree. Labour needs to get it’s act together so it can capitalise on the shortcumings of this govt. It’s all well and good saying Labour had 9 years but National’s 1 year has be worse than Labour’s 9 years…..
Chris, I have lived in NZ this last decade, and seen power prices go up and up and up – your Labour Prty was in government all through that period. Please stop making your party look foolish – come up with ways to lower power prices, lay off the moaning about what this government is doing because, on the face of it they’re actually trying to do something about the problem, and YOU didn’t ! Start being constructive, then we’ll start giving the party some support.
It seems to me that National is having a much easier ride in their first year (2009) than Labour did (2000).
Labour in their first year had tonnes to do to stop the bottom from falling out.
Labour had to stem the flood and indeed reverse the zany economics and politics of Ruthanasia; expensive, wasteful and unworkable ideological provider-purchaser split in health & other areas; out-of-control and costly contracting out of policy advice and outsourcing of service delivery; etc.
Labour had to get things under control and deal to the ill effects of the Bolger-Shipley Administration that promoted ‘hands off’ Government (the old version of what might now be ‘do nothing’ Government), ‘let the market rule’ (the old version of what might now be let the greedy corporate interests consolidate and perpetuate their position, and continue to sell out common public interest to private interest) and the false promise of ‘trickle down’ economics.
I wasn’t and am not a Labour Party member. Nor was or am I a National Party member. But I recognise what the Labour Government did for the common interest of NZ society and to help NZ shape an independent identity for itself with clear vision on the world stage. Seems to feel now like some of that have been lost or abandoned in this first year of the National Government.
I agree with RichG .. almost all the posts on this blog attack the Nats or Maori or ACT and in many cases in a personal and rude way. This power price attack is incredible when people died, well at least one, under your watch because a family couldn’t afford to pay the power bill (and many other bills I would suggest).
Why don’t you stop or at least reduce these lame attacks and concentate you energy for coming up with alternatives?
Okay, so having torn strips off what’s come out today, Chris, by all means feel free to tell us what you would have done instead Did you put any of these ideas forward during the review?
Some people have short memories.
How many $bullion was the NZ electrical consumer overcharged under the 9 years of Labour rule?
$2bullion was it?
Sorry – billion
That is crap Gary Jones. When Labour came into power in 1999 they inherited an economy that was due for 2-3% growth. National came into power with no growth forecasted. Note the difference?
I’m sure I’m just one of many power consumers who doesn’t understand how the electricity market works. Surely though another reason why power prices have increased is because the price of natural gas keeps going up? Contact’s justification for putting gas prices up in the New Year is that the price they pay for gas increased by 25% over the last year. With National keen to see more gas-burning power stations built, the likes of Genesis Energy and Contact are likely to keep bumping power prices up in an attempt to recoup escalating fuel costs.
Then there are the capacity issues in the gas pipeline network into Auckland. Last week Gerry Brownlee told the major players they needed to work together and sort out a solution. If that results in a new pipeline being built, what’s the bet Vector will try to recover the cost by increasing transmission charges for electricity generators and gas retailers – who will probably pass those increased costs onto the consumer.
And thirdly, there are the costs that will (eventually) fall due under the ETS. I can’t see how power prices are going to level out when all these costs are going to be loaded onto the electricity generators who burn coal, gas and diesel.
Inability to flood 20 acres of ti tree for micro dams+ stupid fixation with wind + not even allowed to mention nuclea… = power crisis. Loved the line from the politician/energy dude who when told “but the people will not accept coal electricity” countered with “wait till they have to start accepting cold showers”
Electricity prices and line charges 1991-2008
Fun times.
the blue line is a worry SR .. lets all hope the Govt can at least slow that trend. Will be interesting to see it in a years time.
In the Cabinet paper Gerry Brownlee presented to his colleagues on Monday, he included a chart comparing electricity prices between the three sectors up to the end of 2007. The chart doesn’t include figures for 2008 (which have been publicly available since July when MED released the Energy Data File).
Gerry’s graph to Cabinet shows prices continuing to rise for all sectors. In choosing not to include the 2008 figures, who would know that industrial and commercial electricity prices actually decreased over the year?
It’s the same stunt he pulled when National’s Energy Policy was released in Aug 2008. His graph charting energy security margins includes data only to the end of 2006 and doesn’t take into account all the new generation that was commissioned in 2007 and 2008.
jabba, there might be a bit of lag time depending on when it’s actually meant to start as well as how long iy takes to implement.
I hate the way the older people get dealt to every winter while people play games with their lives for petty policital purposes, and dare I swear on this blog .. BONUSES
The whole power market is smoke and mirrors. Dont you see it, all the ‘choice’ you have is the colour of your bill. Electricity is electricity. The fact is, that the electricity that comes into your house can come from anywhere – the electrons arent stamped with ‘Genesis’ or ‘MRP’ on them.
Millsy, many consumers like myself chose to sign up with Meridian only because we thought it would send a strong signal to the Govt that we prefer renewable generation.
Can someone more knowledgeable explain why power prices for industry and commercial businesses decreased last year? Seriously. I don’t understand why residential customers copped such huge increases but businesses didn’t.
Re. my earlier post about dodgy graphs from the Minister, here’s a link to Monday’s Cabinet paper http://www.med.govt.nz/templates/MultipageDocumentTOC____42317.aspx and on page 133 of this second document is the graph that shows the true state of affairs for electricity prices http://www.med.govt.nz/templates/StandardSummary____15169.aspx (Sorry, I don’t know how to do hyperlinks on here)
Assume you’ve finished reading the entire paper now Chris, any further thoughts on it?
Kaukapakapa,
If you think that some how Meridian has a way of sending the power they make straight to your house, you have to be on something.
Good grief, Millsy – I’m not an idiot. It’s no different from buying free range pork/bacon at the supermarket. You’re using your buying power to signal your preferences, and hopefully the owner listens and stocks more of that product (at the expense of competing product).
I would have thought that if there was a huge customer switch to Meridian, even though their prices might be higher, it would indicate consumers chose the company because it only generates electricity from renewable sources. That is, until it gets landed with Whirinaki.
The Minister’s ETAG group suggested Whirinaki could be sold off. It will be interesting to see if the Bill allows Meridian to dispose of Whirinaki, or if the legislation forces Meridian to keep it as part of its generation portfolio.
Hey man appreciate your environmental thing but some of us can’t afford to eat let alone have expensive power.
I know I’m very lucky my family’s able to choose, Spud. Your post reminds me of news items about fizzy drinks being cheaper to buy than milk, and fruit/veges costing more than junk food. We all know which are better for us though. In one of my earlier posts I noted that the amount industry/business paid for electricity DECREASED in 2008. Why do residential customers get hit with massive increases and why can’t power retailers be a bit more even-handed?
I do agree with you that clean power is better, I just can’t afford to be choosey. Good for you for choosing the cleaner power.