Expect power bill rise if state assets sold: analyst

Photo / Mark Mitchell

Govt accused of stifling criticism by shutting down public consultation on sales plan early.

Private sector power companies charge about 12 per cent more for electricity than their state-owned counterparts, says independent energy analyst Molly Melhuish as she warned the Government's asset sales plan will drive prices higher.

Labour says the Government has moved to prematurely shut down public consultation on its "mixed ownership model" legislation to stifle politically embarrassing information like Mrs Melhuish's analysis.

Mrs Melhuish, who was one of the overwhelming majority of the 1400 submitters who have opposed the Government's Mixed Ownership Model Bill, yesterday produced fresh analysis supporting her claim private power companies charge more than state-owned ones.

She also produced research showing residential power increases in New Zealand outstripped those in other developed countries over the long term and that this was the only developed country where power prices had continued to rise rather than fall following the recent recession.

But Opposition MPs on Parliament's finance and expenditure committee, which is considering the bill, say proper consideration of her research by Treasury officials would not now be completed before the legislation is reported back to Parliament.

The bill was scheduled to be reported back on July 16 but committee chairman Todd McClay decided last week that consideration of the bill would wind up this week.

After a committee meeting yesterday Mr McClay confirmed he expected the bill to be reported back to Parliament for its second reading next week.

That decision comes after a series of public hearings which were marked by bitter sniping between Government and Opposition MPs and complaints submitters were not being given enough time to air their views.

Greens co-leader Russel Norman said the process had been undemocratic.

"It's been very rushed, there hasn't been proper consideration of the submissions or the concerns raised in the submissions. We've had inadequate information from Treasury because they haven't had enough time either."

Given the original July 16 reporting date, he said, "It's not as if we were short of time.

"Obviously the Government's trying to rush it through for political reasons because it's a hot potato."

Labour finance spokesman David Parker said Government arguments in supporting the asset sales plan had been "thoroughly unpicked by the submitters".

"It is a weeping sore for the Government because it's become clear that it will increase power prices, increase asset inequality, increase the Government deficit, and over the long term, increase the current account deficit leaving New Zealand worse off."

Mr McClay said July 16 was only the deadline and "the committee was able to get through its work before that time".

He rejected the Opposition claims it was a rushed process saying there had been eight meetings where 150 submissions were heard.

POWER COSTS
Residential electricity average cost
28.1c a kw/h private companies
24.79c a kw/h state-owned companies