Goff fibs on power prices

November 19th, 2011 at 4:11 pm by David Farrar

On The Nation today:

Duncan        So looking at the asset sales, if you were to get into government and not sell those assets, how would you control ?  Because that has been a major issue over the last ten years, and National one of their big attacks in office has been that under your leadership, when I say leadership I talk about the Labour government, went up 70-80% over ten years.  What will you do?  What reassurance can you give to voters that you’ll control .

Phil              Oh the power prices are gonna fluctuate depending on how much extra you build in terms of generation.  No but what you can assure them is this.  That you don’t have an outside foreign investor coming in, wanting a really big return on their investment, because you know, and you know from Contact Energy that this happened, that your power prices will go up if you privatise.  Contact Energy was charging 500 bucks a year more for an average family of four, than any of the SOEs.

As Garner pointed out power prices went up massively under Labour, and the increases under National have been much lower. But the big fib is on Contact Energy charging an average family $500 a year more.

First of all, even if true it would not be a big issue, as people can swap providers and hundreds of thousands have and do. But it is not true.

Consumer has price info for various areas. I picked Auckland to start, as our most populous area. The current prices:

  • Genesis $2,096
  • Mercury $2,083
  • Meridian $1,971
  • Contact $1,918

So in Auckland Contact is cheaper than the three SOEs. The total opposite to what Goff claimed. They are in fact $178 cheaper than the most expensive SOE, not $500 more expensive.

Why is no one in the media fact checking these claims?

I decided to check all four major cities. Christchurch is

  • Meridian $2,055
  • Mercury $1,893
  • Contact $1,833
  • Genesis $1,763

Contact is cheaper than two of the SOEs.

Wellington is

  • Contact $2,093
  • Mercury $2,080
  • Genesis $2,042
  • Meridian $1,945

In Wellington they are more expensive, but by only $13 to $148.

Dunedin is

  • Meridian $1,929
  • Mercury $1,967
  • Contact $1,908
  • Genesis $1,756

Again Contact is cheaper than two of the SOEs.

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22 Responses to “Goff fibs on power prices”

  1. jaba (2,092 comments) says:

    goodness, Phil was wwwwwwwrong .. aaaaaaagain .. gee and he maybe PM in a week and a few hours

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  2. Other_Andy (2,466 comments) says:

    And Labour promises the lower the power prices of the SOEs.
    What will happen with the dividends of those SOEs?
    I thought they needed the ‘profits’ to fund their campaign promises?

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  3. Inky_the_Red (744 comments) says:

    if you look at the site you can see the graphs
    http://www.powerswitch.org.nz/powerswitch/region/N02/N024/price_trends

    Until recently Contact Power (including their subsidiary empower) prices and Trustpower prices were the highest looking at the graphs Contact have recently lowered prices. I recall they did this by increasing the early payment discount.

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  4. Johnboy (15,460 comments) says:

    Jesus David. I wish you would stop letting the facts get in the way of a good bit of spin for Goofy.

    You will only confuse his diminishing supporters even more than they already are. :)

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  5. nicolebegg.com (13 comments) says:

    Actually DPF, you only did 3 of NZ’s main cities plus Dunedin. Hamilton is more populous than Dunedin and is our fourth largest centre.

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  6. jaba (2,092 comments) says:

    Goff looked very iffy during the whole interview

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  7. Jimbob (641 comments) says:

    Just keep lying and hope some of it will stick. From memory I think Trevor is good at this.

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  8. toad (3,672 comments) says:

    I’m not defending Goff, but your use of current price statistics is misleading. If you look at the trends over the period the Consumer Powerswitch site charts, you will see:

    Auckland: Contact most expensive of the four between July 2010 & July 2011.

    Wellington: Contact most expensive of the four between November 2008 and November 2011.

    Christchurch: Contact most expensive of the four between March 2011 and July 2011

    Dunedin: Contact most expensive of the four between November 2008 and July 2011.

    Also note the Empower prices where it is a supplier, given that Empower is a wholly owned Contact subsidiary – consistently higher than those of the SOEs over almost the entire period charted.

    [DPF: Even if one goes back, never has there been a $500 difference, and Goff did not refer to the past but implied the current prices]

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  9. badmac (139 comments) says:

    Just to keep the “fact checking honest”. DPF you didn’t chose the 4 major cities, they would be Auckland, Wellington, Christchurch, Hamilton, then Dunedin (after Auckland was put back together).

    Also it might pay to check who split up ECNZ in 1998/1999. and what effect that had on power prices. Thanks Max, we had the second cheapest power prices in the world (Canada was cheaper due to is large Hydro base). Yes I know Labour didn’t follow through and sell the SOE’s as was originally planned and instead raped (demanded bigger and bigger dividends) from the 3 SOE’s, you can’t blame Contact/Trustpower who simply went along with ratcheting up prices because it made good business sense, why would they do anything else, shareholders demand a return on their equity, and if Labour demanded 12% from its SOE’s, then contact and trust power weren’t going to say “no we are making enough, let’s just hold our price here”.

    [DPF: The Consumer page has quick links to those four cities, so don't me a stupid pedant and suggest I cherry picked the data.

    And the Bradford reforms were followed by the lowest increases in power prices for some years.]

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  10. big bruv (13,526 comments) says:

    Oh the irony!

    Toad pulling DPF up for not being clear. This from the Greens greatest cheerleader and from the party who never tell the truth about anything.

    BTW Toad, did you have a good night stickering last weekend.

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  11. Elaycee (4,322 comments) says:

    Either someone is providing Goff with appallingly bad ‘facts and figures’ or he is dreaming them up off the top of his head and is just stupid.

    FAIL.

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  12. jaba (2,092 comments) says:

    I am very worried about Cunliffes spreadsheet, but just imagine what will happen when the Greens hand boxes of twink to him and say “‘we need a few adjustments Dave”.

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  13. oldpark () says:

    When Cullen ruled the roost with Clark and Goff they allowed the Wellington Power Company to be sold to the Hong Kong Chinese.
    Labour said it was all ok as power was not a strategic asset.Would be interesting to read what the power charges are for that company.

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  14. toad (3,672 comments) says:

    @big bruv 4:57 pm Even when I used to hang out with some anarchists in the ’80s I have never defaced an election billboard.

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  15. Grizz (531 comments) says:

    All due respect, the issue of asset sales is about the generators, not the retailers. Anyone can set up an energy retail company and the public in most cases have a choice of their providers. The focus of the interview should be about what generators charge to produce a unit of electricity. Another factor for contact energy was getting its electricity to the market. Their costs were made higher as the Transpower infrastructure was so run down. A scenario that is only now being rectified.

    A model to consider that seems to work well is Trustpower, which is partly owned by a community trust and partly privately owned. I have not seen anyone report on how well they are functioning. I have not heard any complaints about their ownership model either.

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  16. davidp (3,551 comments) says:

    My pensioner parents were banging on about privatisation and their expectation of higher bills when I saw them last weekend. After some discussion about the relative benefits of a government near-monopoly where a Cullenesque Minister of Finance decides power prices need to increase so that Labour can hire more policy officers, versus a competitive market, I find out that they’ve worked out Contact is cheapest for them and that is who they use. That pretty much ended the argument.

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  17. dog_eat_dog (757 comments) says:

    So has anyone asked Phil why Labour backflipped on claiming they wouldn’t pull dividends from the power companies? Whale had that one a few weeks ago, I think.

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  18. annie (540 comments) says:

    Fibs? Don’t you mean lies? Ugly word, but Mr Goff is pretty free with its use himself, usually in accusing John Key of some transgression.

    And Phil’s memory is pretty short, he seems to forget what he has been doing for the past 25 years or so. If only we had more able reporters, they’d remember for him, or at least manage a search of their own archives.

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  19. East Wellington Superhero (1,151 comments) says:

    Not everyone knows it, but back in the 2000s when Labour was pulling out big dividends instead of reinvesting into plant (or subsidising lower powers prices if you’re into that sort of thing) guess who was the Deputy Chair of Meridian Energy?

    That’s right. Charles ‘Fat Cat’ Chauvel.

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  20. wat dabney (3,716 comments) says:

    Labour wishes to keep state control of the power sector so they can continue to turn the screw and use it as a (highly regressive) stealth tax mechanism.

    And don’t forget that power prices will rise even more dramatically if renewables are forced upon us.

    That’s okay for the middle class members of the Green Party, but leaves everyone else struggling to pay the bills.

    Sorry kids. No holiday this year.

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  21. wat dabney (3,716 comments) says:

    Wind turbines are being turned off during periods of high wind in case they become too loud.

    http://www.telegraph.co.uk/earth/energy/windpower/8901431/Switch-off-for-noisy-wind-farms.html

    And, if you’ll recall, wind turbines in Britain actually consume power during winter – when they’re most needed – to stop them from freezing when there is no wind.

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  22. Smoko Joe (1 comment) says:

    Toad is right. Contact used to be the most expensive compared to the SOEs, but has recently lost so many customers that it had to introduce a 22% discount for online customers. This made them look highly competitive on the Powerswitch website, whereas previously they looked way out of the money. Toad’s also right, though, to say the difference was never $500 per household. Even Contact weren’t clever enough to be that rapacious. The highest tariffs are now charged by TrustPower, but they sail under the radar, and nobody notices.

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