National says Government is big winner in power 'crisis'

1.00 pm

National has accused the Government of profiting from problems in the electricity market on a day when Parliament is debating the Electricity Industry Bill under urgency.

National's Tony Ryall and Pansy Wong said in a joint statement today that the Government must address the large profits being made by state-owned electricity generators as low hydro lake levels force electricity price up.

"The Government is the big winner out of the current crisis. The state-owned generators are stuffing the Government's pockets with cash; it is pocketing the loot while small business people face a six-fold increase in the price of electricity."

Yesterday, high wholesale electricity prices forced retailer Natural Gas Corp (NGC) out of the retail electricity market.

NGC's retail subsidiary, On Energy, agreed to sell its remaining 290,000 customers to state-owned Genesis Energy. The company had already sold its entire 116,000-strong South Island customer base to state-owned generator Meridian Energy last month.

Mr Ryall and Mrs Wong said State-Owned Enterprises Minister, Mark Burton, was meeting SOE boards for the annual Statement of Corporate Intent negotiation process and would discuss how much profit the Government would receive this financial year.

"If the Government is seriously concerned, it should be demanding that the SOE boards divulge how much extra profit is being made by their generation and retail business, and how much is coming from residential and small business customers," they said.

"The Government should assure New Zealanders its own companies are not making excessive profits by revealing what those profits are."

Mr Ryall and Mrs Wong said the Electricity Industry Bill being debated under urgency by Parliament today would do little to fix the problems caused by the low rainfall.

Opposition MPs have said the bill – which sets up a regulatory environment and authority structure which the Government can force on the industry if it is not happy with efforts to self regulate – gives the Government "draconian" powers over the industry.

However, the Green Party and New Zealand First have both said they will support the legislation as it goes through a clause-by-clause debate over the next two days.

A final debate on the bill is expected next week.