The Government's mantra that a competitive electricity industry will drive down power bills is false, Labour is claiming ahead of a visit to Parliament by energy executives.
The Electricity Authority and Genesis Energy will appear before a select committee tomorrow morning for their 2012/13 financial review.
Labour energy spokesman David Shearer said he would challenge the authority on its belief that a highly competitive market was leading to lower power prices.
"My belief is that competition hasn't been as effective as Government and the power companies are claiming.
"The bottom line is that consumers are continuing to face increasing prices and there is nothing that I can see that will be able to bring those prices down as the market is currently structured."
Labour and Greens are promising to introduce a single electricity buyer if elected, but Government believed this model would stifle competition and lead to higher electricity bills.
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The Electricity Authority said last week that strong competition in the electricity market was forcing retailers to absorb cost increases rather than pass them on to customers.
It said that costs incurred by retailers had increased by 21.5 per cent over the last three years but prices charged to consumers over the same period went up by just 12.5 per cent.
Energy and Resources Minister Simon Bridges has said that the present market of 15 independent electricity retailers was one of the most competitive in the world.
He has cited companies' offers of prompt payment discounts, credits and fixed prices as evidence, and has encouraged households to shop around for the best price.
State-funded initiatives such as the Electricity Authority's "What's My Number" and Consumer New Zealand's Powerswitch had encouraged residents to find their cheapest retailer. Nearly 400,000 households have switched companies each year since the schemes were introduced.
Asked in the House yesterday whether New Zealanders were paying too much for their power, Mr Bridges said: "I think prices reflect the environment that we find ourselves in with significantly increased investment in transmission and infrastructure."
Electricity prices have risen 22 percent under the National-led Government.
Mr Bridges argued yesterday that Government had halved the power price increases which took place under the previous Labour Government.