ANOTHER VIEW
Remember how the reforms of the electricity industry were going to make power cheaper? Max Bradford, Energy Minister in the Shipley Government in the 1990s, practically went hoarse telling us how splitting ECNZ into three SOEs - Genesis, Mighty River Power and Meridian - and separating line and
retail-energy businesses, requiring retailers to buy power to onsell, would be a good deal for the consumer. The consumer is still waiting.
Now the wholesale spot market can have price spikes of up to 150 per cent, as happened in December 2010, and home power bills virtually doubled in the first decade of this century - increasing at three times the rate of inflation over the same period. The big four generators, meanwhile, warn that current power prices are "unsustainable" - by which they mean that they are too low.
But a Commerce Commission report drew on an analysis by Stanford University economist Frank Wolak, which assessed the cost to the consumer of overcharging by power companies at around $4.3 billion over six years - or $1000 for every man, woman and child in the country.
The problem is that, with the exception of Contact Energy, which is publicly listed and 51 per cent owned by an Australian company, the power companies have only one shareholder: the Government. So a good chunk of that $1000 that we've all overpaid has ended up in Government coffers. It takes some gall for politicians who swear by the "user pays" principle of modern neo-liberal economic orthodoxy to preside over a system that makes families, beneficiaries, the aged and the infirm pay $1000 for something they haven't used.
