Colin Espiner on Labour’s “crazy” energy policy

April 19th, 2013 at 10:00 am by David Farrar

writes at Stuff:

Has actually gone insane? As in stark, raving, Monster Loony Party mad?

I’m assuming the answer is yes, judging by today’s incredulity-creating announcement that, if elected next year, Labour will essentially nationalise the electricity industry.

This is the sort of policy UK Labour would have had under Michael Foot in the 1970s.

At a stroke, Labour is proposing to dismantle the electricity market, ruin Contact Energy and Mighty River Power and decimate the Government’s share float plans for both MRP and Meridian. 

Oh, and sell thousands of mum and dad investors down the Mighty River, since MRP’s share price would almost certainly plummet if the company was forced to retail only through a government department at whatever price it deemed to be fair. 

Not just MRP and Contact. Also TrustPower and Todd Energy. Every single generator of electricity would effectively become nationalised as they would only be allowed to sell electricity to the Government at whatever price the Government unilaterally sets.

I’m no fan of high – and I don’t own any Contact or MRP shares – but what Labour is proposing is essentially a la Brazil or Argentina. This is Third World, funny-money stuff. Goodness knows what the fi

nancial markets will make of it. And what message does it send to overseas investors? 

The impacts of this policy will be felt far beyond the electricity sector.

I’m tempted to see this as a last-ditch attempt to derail National’s plans to part-sell its electricity assets, but if that’s the case it’s going to seriously annoy a lot of investors who were poised to put funds into Mighty River Power. 

It’s extremely rare that I agree completely with Economic Development Minister Steven Joyce, but his comment today that the plan was “a return to the 1970s-style monopoly provision of electricity…Only North Korea and Venezuela did not think such ideas are nuts” is pretty much spot on.

I agree with Joyce that Labour is virtually sabotaging the economy. 

As does Business NZ, reported here.

Also the Herald editorial is scathing:

Earlier this week, a Herald editorial suggested people thinking of buying Mighty River Power shares had little to fear from David Shearer’s statement that the Labour Party planned to shake up the electricity market when next in power. That, however, was before it was known how far back in time Labour planned to travel and how errant its policy would be.

We need policies for the future, not attempts to turn the clock back.

This suggests nothing less than a return to central planning. It harks back to the situation that pertained before the electricity industry was transformed from a state monopoly into a market supplied by four main generating companies. Mr Shearer seems to be looking at that time through rose-tinted glasses, ignoring the inefficiencies and, most notably, the blackouts that were a feature.

Security of supply would become a real issue. Why would a generator invest in new generation capacity when the price for any power it produces will be unilaterally decided by a government department?

The most unfortunate aspect of Labour’s new policy is that it has identified the problem. “When markets are not truly competitive, excessive profits are extracted from consumers,” David Parker, the party’s energy spokesman, said yesterday. The most logical response, however, is not to return to a failed approach but to provide the setting for competition to flourish. Despite all the criticism of price rises, the market has succeeded to the extent that there has never been a power failure. It also has the framework that offers the best outcome for consumers.

The telecommunications market confirms as much. But making a market truly competitive generally requires a substantial amount of tinkering. Temporary government intervention may be required to facilitate the development of competition. But that is not Labour’s intention. In cahoots with the Greens, it proposes a move which, if implemented, would be every bit as damaging as some of the latter party’s monetary policy delusions.

More and more of the policies being put forward by Labour and Greens are 1970s policies.

Their monetary policy is to go back to pre 1980s reforms. Their welfare policies are to bring back universal child benefits such as we had in the 1970s also.

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55 Responses to “Colin Espiner on Labour’s “crazy” energy policy”

  1. pete (428 comments) says:

    Shouldn’t you go back and correct your recent misrepresentations before spinning new ones?

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  2. krazykiwi (9,189 comments) says:

    We need policies for the future, not attempts to turn the clock back

    The problem with Labour is they don’t know what they stand for today,

    ..so ..

    they can’t imagine how they fit into the future tomorrow

    .. so ..

    so they’re resorting to trying to re-create yesterday.

    The massive tragedy, and incitement on the intellectual capacity of New Zealanders generally, is that they’ll still receive significant support on election day.

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  3. Bob (478 comments) says:

    Labour are reverting to type. Their way of dealing with problems is either state control or dishing out welfare. It’s the Polish shipyard solution.

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  4. toad (3,668 comments) says:

    Joyce’s North Korea reference is ridiculous.

    This is similar to South Korea, which has a single buyer policy. Similar single buyer policies also operate in Brazil, China, India, Indonesia, Italy, Japan, Malaysia, Mexico, Pakistan, Philippines, Ontario (which returned to a single buyer model after the failure of a regulated market), South Africa, Vietnam, EU (one of three market options EU members can choose from), Massachusetts, Ohio & California.

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  5. greybeard (49 comments) says:

    I heard a noted academic ( Geoff Bertram ) talking about this with Tim Fookes a short while ago and I am sure he said that there would still be competition between power generators. This would suggest that the Government would be buying at different prices from the generators. Did anyone else hear this interview, did I get it wrong or did the Professor ?

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  6. queenstfarmer (742 comments) says:

    Another issue is that by artificially driving down the price, demand will increase (perhaps I’m being generous, but I assume that at least one person in the Greens understand elementary laws of supply-and-demand).

    So the Labour/Greens/North Korea proposal will lead to MORE power consumption. It reduces the incentive for efficiency.

    This in turn, and coupled with population increases etc, requires more generation capacity. But who will invest in increasing supply, when that investment could be destroyed at the whim of Russel Norman?

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  7. queenstfarmer (742 comments) says:

    This is similar to South Korea, which has a single buyer policy

    South Korea does not dictate the generation price, or force generators to increase capacity. That is the key issue.

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  8. flipper (3,533 comments) says:

    Well my horrible little green Toad… and all of the other red melons…

    Choke on this, which will be the consequence of your idiotic wish to return to Stalinist days:

    http://www.theatlanticcities.com/technology/2012/12/new-highly-detailed-image-north-koreas-lack-electrical-infrastructure/4201/

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  9. emmess (1,367 comments) says:

    If this policy were to be implemented, what would stop Labour and the Greens using it as a ‘corporate welfare’ slush fund using it to purchase electricity from politically favoured companies using some wacky unproven green technology at ridiculously high prices, provide massive subsidies and selling it on at or below market rates?

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  10. backster (2,073 comments) says:

    An interview with Shearer stated that the Government Agency would impose a margin above the cost of generation certainly implying different prices from different generators.
    I don’t know much about the other states but California certainly has little to recommend it as an example of excellence.

    The Labour/Green co-alition might be better placed to buy fruit and vegetables from all the growers at a price they set above the cost of production and then distribute them in the same manner.

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  11. kiwi in america (2,431 comments) says:

    Toad
    The California example is a very poor one and rather makes the point made by the various critics of the Labour/Green’s policy. Californians pay 25% higher than the average US electricity prices http://www.npr.org/blogs/money/2011/10/27/141766341/the-price-of-electricity-in-your-state AND regularly suffer the indignity of brown outs during heat waves after following pretty much the exact model Shearer/Norman have proposed.

    This is a panic lurch to the left by Labour to prevent the Greens from outflanking them. The Greens having never been in government so lack any institutional restraints that still linger in Labour since so many of Labour’s front bench were Cabinet Ministers in the 5th Labour government. This, combined with their hard left economic orientation, leads to their pie in the sky policies. Labour ought to know better – that such a market unfriendly policy announcement would spook markets and lead to a raft of unintended consequences. Its hard to know if rattling the markets (and likely affecting the MRP partial float) was a conspiracy or a cock up and given that in the world of politics most mistakes like this are cock ups, I would put this down to Shearer’s complete lack of real commercial world experience. As for the Greens this was a feature not a bug and underscores why a Labour Green coalition with Russell Norman as Fin Min would be disasterous for NZ business.

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  12. scrubone (3,044 comments) says:

    It’s incredible.

    But then, they weren’t exactly punished for the last naked power grab, or the one before that.

    In fact, employment law is about the only place where National has made any sort of serious attempt to roll back labour policy.

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  13. davidp (3,540 comments) says:

    The Greens and Labour seem to be using Argentina as their model. Popularist policies that make little sense. Nationalism. A dislike of foreigners and an attempt to withdraw from the world economy. Inflation and devaluation. All the factors are there and I have no idea why they haven’t realised that Argentina is a disaster.

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  14. Pita (365 comments) says:

    Would the Labour/Green scheme still go ahead if the government canned their asset sale program?

    Apparently the dividend stream, that would be lost as a result of the Asset sale, is no longer a driving issue for either Labour/Greens as they are prepared to forgo it entirely by reducing electricity company profits.

    It would be interesting to determine how recently they were banging on about lost dividends if, as Shearer now says, this plan has been developing for some time.

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  15. Pete George (22,731 comments) says:

    The effects – five minutes ago I checked Contact on NZX and they were -5.49%, now they are 6.23%.

    That’s shear crazy.

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  16. toad (3,668 comments) says:

    @Pita 10:59 am

    Apparently the dividend stream, that would be lost as a result of the Asset sale, is no longer a driving issue for either Labour/Greens as they are prepared to forgo it entirely by reducing electricity company profits.

    The dividend stream will not be forgone completely. To say that misrepresents the policy. Sure, the dividend stream to Governemnt will be reduced. I’m quite happy to have a reduced dividend stream to the Government if it gets power prices down. National’s partial privatisation is the worst of both worlds though – reduced dividend stream to the Government AND power prices will go up to maximise the return to private investors.

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  17. Paulus (2,490 comments) says:

    Labour are being led by the Green Nutters and their Communist leader.
    Sad to see Labour failing as the Opposition, being conned.

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  18. alloytoo (430 comments) says:

    @ Toad

    The South African example is a poor one.

    There is one state owned generator (Using coal and nuclear) selling to cities and municipalities. (So no deregulation, no competition, no choice)

    The result was a complete absence of investment in the sector for 16 years and no maintainence beyond the absolutely necessary.

    in 2008 capacity began to run out resulting in rolling blackouts. The generator had to go to the regulator and beg for huge increases, and borrow heavily to build new coal powered stations.

    Frankly Whaleoil’s spoof about nuclear generation sounded very viable compared to this turd from labour.

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  19. Reid (15,904 comments) says:

    They can’t back down on it now. They’ve jumped the shark. Their roaring mentalism will be fully exposed to scathing after scathing until the only media supporting it are the loons in the TVOne and TV3 News teams. At last they’ve done it. They’ve climbed into bed with the Gweens and at one stroke, before they’ve even been elected, they’ve decimated themselves.

    This shows doesn’t it the incredible power of the insanity running inside the Gween team. Any association with it immediately results in a complete and utter breakdown of one’s ability to perceive reality in favour of the fantasy world the Gween team inhabits.

    As this thing develops and they realise they’re going to have to back down, they’re going to have to tie it on Shearer and pretend he’s the only mental who thought it was a good idea so he’s the only one who has to go. I sense a Silent-T in the background during the leadup to yesterday’s announcement, egging them on. Of course it’ll work, it’s brilliant, he was probably quietly saying.

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  20. Tom Jackson (2,458 comments) says:

    Who cares what this moron has to say? Like the rest of the usual suspects in NZ journalism, he is a semi-educated half wit. Even if energy was completely nationalised (which is not being promised here), it is hardly a disaster. New Zealand used to have nationalised power and it was reasonably priced and reliable.

    All this just reeks of childish panic instead of actual engagement with the policy. To his credit, Leighton Smith isn’t buying into the hysteria.

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  21. Tom Jackson (2,458 comments) says:

    Sure, the dividend stream to Governemnt will be reduced. I’m quite happy to have a reduced dividend stream to the Government if it gets power prices down.

    Yes. Those of us who have power bills to pay and don’t have some fervent ideological commitment to privatising everything regardless of consequence can understand this.

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  22. Reid (15,904 comments) says:

    Sad to see Labour failing as the Opposition, being conned.

    It’s not sad at all. Quite the contrary. I can’t wait for their next clever move on the political chessboard. It’ll take a lot to top this one, but I’m sure they’ll give it a go.

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  23. ross69 (3,652 comments) says:

    We need policies for the future, not attempts to turn the clock back.

    In other words, National doesn’t give a shit about the price of power. It could go through the roof and they wouldn’t bat an eyelid.

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  24. cha (3,779 comments) says:

    Deregulation in Texas made provisions for aggregation to drive competition and looking at their prices it appears to have been successful.

    http://en.wikipedia.org/wiki/Deregulation_of_the_Texas_electricity_market

    http://www.puc.texas.gov/industry/electric/business/agg/agg.aspx

    http://www.ehow.com/how_8692557_become-electric-aggregator-texas.html

    http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a

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  25. Tom Jackson (2,458 comments) says:

    Why would a generator invest in new generation capacity when the price for any power it produces will be unilaterally decided by a government department?

    Because like anyone else providing a good that has a fixed price, they believe that they can do so for a profit. Canadian health insurance works like this. The various provincial governments decide in consultation what they are going to pay, and it is provided by private businesses rather than a nationalised health service. In practice it works superbly.

    If you lot stopped flapping around like headless chickens, you might come up with some reasonable objections.

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  26. Tom Jackson (2,458 comments) says:

    We need policies for the future, not attempts to turn the clock back.

    Well, the current system means that NZers pay exorbitant rates for power compared to other countries. That’s not good enough, and we can do better.

    If you want me to pay ridiculous rates for my power just to satisfy your petty ideological whims, then you can go forth and multiply my friend.

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  27. Reid (15,904 comments) says:

    If you lot stopped flapping around like headless chickens, you might come up with some reasonable objections.

    By doing this Liarbore has cast a pall over the international markets who are wondering about whether or not they’ll start doing this in other areas and what does this mean for international demand for any NZ business, were they to attain power?

    I know you clapping cheering idiots really really really HATE the markets and cheer at every blow against it, because you simplistically associate them together with the tiny handful of truly evil people in it, who are really the ones you hate, but that it doesn’t apply to the markets themselves you fools, is something you haven’t quite thought through in your young, immature, facile and naive little minds. And fact is, we need to be held in good regard by the markets, it’s not a nice to have, it’s an essential requirement toward running NZ’s economy.

    Just because you believe you’re right because it’s a blow for the cause, to sabotage the asset sales program, doesn’t mean you are. Because once again you idiots have conflated US with the program. This is not a blow for OUR freedom as you fools see it. No. What it is is a very expensive billion dollar policy failure, because of you guys. And no upside, at all, for US, even if your dumb plan comes to fruition. How mental is that?

    And BTW, I mentioned it to the gas station guy last night and he said he was going to buy shares. Those are the people you’ve sabotaged. Proud of that?

    I know you think you’re sabotaging wealthy men in expensive suits who sit in luxurious leather chairs in the club, but it’s those guys who you’re really doing it to.

    If you want me to pay ridiculous rates for my power just to satisfy your petty ideological whims, then you can go forth and multiply my friend.

    And the roaring mentalism continues Tom. The mark of the truly insane is that they don’t know that they are.

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  28. tvb (4,193 comments) says:

    The worst period for power increases occurred under labour when they used the generating companies as cash cows for revenue. Now they are going to forego dividends and company tax and have a monopoly purchaser of power. This will lead to under investment and power shortages as generators will not use expensive facilities like Huntly. It is the prospect of shortages that will doom the Labour government hopefully forever.

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  29. JC (904 comments) says:

    Toad,

    Here Sth Korea’s pricing structure for the education sector:

    “Outside of residential customers, KEPCO offers many pricing options for each customer class. Take schools, for example. Schools fall under the educational services rate class, and nine different options exist for this rate class. Low demand customers (between 4 kilowatts and 1,000 kilowatts) are offered low- and high-voltage rates with various options, and are charged more than the high-demand customers. Three seasonal rates exist: summer (highest rates), spring/fall (lowest rates), and winter. This level of detail allows for some rate reduction planning, such as incentives to take vacation.

    The high-demand educational rates have even more detail, shown in the figure below. In addition to the rate structure defined above, three daily rates exist: off-peak (11 p.m. to 9 a.m.), on-peak (11 a.m. to 12 p.m., 1 p.m. to 5 p.m.), and mid-peak (9 a.m. to 11 a.m., 12 p.m. to 1 p.m., 5 p.m. to 11 p.m.). Customers are also offered different voltage levels: low voltage (220V and 380V) and three high voltage levels ranging from 3.3kV to 345kV. A major price difference exists with peak rates, where on-peak rates can be 325 percent higher than off-peak rates. With this dynamic pricing scheme, consumers are more energy-aware and can change their behavior accordingly to minimize energy consumption. Pricing rates like these have helped mitigate South Korea’s already large electricity demand growth.”

    Good luck with introducing that to NZ schools.

    JC

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  30. greybeard (49 comments) says:

    Hey ! Why am I getting negative votes at my 10:28am comment ? All I am doing is asking a question: I am not suggesting that I am in favour of this proposal.

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  31. georgebolwing (602 comments) says:

    The labour proposal is not that NZ Power will set an arbitrary price.

    In the current system, generators enter bids to supply an amount of power at a price for each 30 minute block. The market operator ranks the bids recieved by price and buys the lowest-cost bundle of power needed to meet demand. ALL bidders are paid the bid price of the highest cost sucessful bidder. This is simply marginal cost pricing and is how markets work.

    Under labour’s proposals, generators enter bids to supply an amount of power at a price for each 30 minute block. The market operator ranks the bids recieved by price and buys lowest cost bundle of power needed to meet demand. Bidders will be paid what they bid, rather than the bid price of the highest cost sucessful bidder.

    Under the current system, generators have the incentive to bid their true costs, since they can never be sure that they will be sucessful. But they know that they will get the highest price bid, so if they are protected from disclosing their true costs by the rules of the market.

    Under Labour’s system, however, the generators will not have the incentive to bid their true costs, since they will be paid what they bid, not the marginal price. Thus the need to have NZ Power check that the price bid is the actual cost.

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  32. Fox (201 comments) says:

    The Nats are missing the point. Even if Labour has come up with a hairbrained scheme doomed to failure, what voters will note most is that at least it’s acknowledging there’s a problem with overinflated electricity prices in this country, and proposing to take real action to do something about it.

    When you compare that to the stick-your-head-in-the-sand-and-do-nothing approach that National has employed over the past four years, in the eyes of many, Labour comes out streets ahead.

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  33. davidp (3,540 comments) says:

    Reid>They’ve climbed into bed with the Gweens and at one stroke, before they’ve even been elected, they’ve decimated themselves.

    Labour in Australia needed the Greens in coalition to form a government after their last election. That and the breaking of the “no carbon tax” promise have contributed to an absolute train wreck of a government. They’ve lost (with spectacular swings) every state government election since then. Greens in state government are being slaughtered. And the polls are currently showing a 10 percent swing away from Labor for the federal election later this year.

    That should be a cautionary tale for NZers. More so since it is likely that Labour and the Greens won’t be able to govern alone, but will have to include NZ First, Mana, and maybe the Maori Party for a coalition of weirdos and racists. It should also be a cautionary tale for the NZ Labour Party, who may win three years in power but be wiped out at the subsequent election.

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  34. slijmbal (1,210 comments) says:

    I am intrigued and cynical about many followers of the left who were happy for power to be a stealth tax under Labour as the government was basically the market setter and profit taker because of its ownership and the price setting rules. However, now National is in power and have incidentally continued the approach of Labour to a lesser extent. So, of course, it must be wrong – I mean Helen isn’t doing it.

    The real issue is that the current set-up does not address competition properly and partial privatisation is unlikely to make a difference either way.

    This also cheers me up – it’s so stupid and blatant that it demonstrates how far to the left the Greens are (and how desperate Labour are), which will hopefully lead to many of the lazy Green voters (environment = good and fed up with 2 party politics) to change their vote.

    To me the Greens are an incredibly dishonest party, which is saying a lot.

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  35. Tom Jackson (2,458 comments) says:

    By doing this Liarbore has cast a pall over the international markets who are wondering about whether or not they’ll start doing this in other areas and what does this mean for international demand for any NZ business, were they to attain power?

    I’m sure that this is not news to you, but you don’t know what you are talking about. There is nothing odd or unusual about a government monopsony, and it is as likely to have a beneficial effect on foreign investment as a whole as not. After all, the Canadian state monopsony on health care was one of the major reasons that North American car manufacturing shifted into Ontario from Michigan. Other state monopsonies for power have existed, so it’s not as if it is an untried policy. If anything, eliminating inefficiency in the energy sector (and if you don’t know that intervention can increase efficiency, then you really have no clue what you are talking about) means more money for New Zealanders to spend on other goods.

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  36. Tom Jackson (2,458 comments) says:

    The Nats are missing the point. Even if Labour has come up with a hairbrained scheme doomed to failure, what voters will note most is that at least it’s acknowledging there’s a problem with overinflated electricity prices in this country, and proposing to take real action to do something about it.

    Yes.

    But it’s not a harebrained scheme doomed to failure. It’s policy that has been tried elsewhere and which has a reasonable chance of working here. Life being what it is, nobody can be certain of success or failure, but it’s worth a shot given our criminal power prices.

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  37. anonymouse (693 comments) says:

    • A single buyer would likely result in higher capital and operating costs.

    • The transition to either alternative arrangement would be complex and
    lengthy with the single buyer, in particular, estimated to take over two
    years to put in place. The risks involved in changing arrangements could
    be significant. The resulting uncertainty could lead to investment
    proposals being put on hold. Direct implementation costs could be large
    and there could be risks of litigation.

    David Parker
    MINISTER OF ENERGY 2006,

    http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/electricity-market/electricity-industry/chronology-of-electricity-reform/electricity-market-review-2006/elec.0095-electricity-market-review-summary-of-review-paper-one-103-kb-pdf.pdf

    Looks like it will be fun getting comments from David Parker on the new proposals

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  38. insider (999 comments) says:

    @ cha
    aggregators already exist in the Nz market and the rules allow them. you could argue in effect that independent retailers like pulse are an aggregator.

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  39. slijmbal (1,210 comments) says:

    Disclosure – I own Contact Shares directly – it appears I am about $1,500 poorer over the last couple of days – might be a buying opportunity. I presume my Kiwisaver and some other investments are also down in value though nowhere nearly as drastically.

    However, this does reinforce the point.

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  40. Pete George (22,731 comments) says:

    A typical response froma Labour Party member on share market collapse:

    @ImperatorFish

    The people benefiting from excessive profit-taking are now realising that the good times may be over? Not seeing a problem.

    They want to see a transfer of wealth.

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  41. kiwi in america (2,431 comments) says:

    Tom Jackson
    Power increases under National have been less than half under Labour – moslly because in attempting to run a more balanced and sound fiscal policy, National weren’t demanding the same high dividends that Labour needed in its ever voracious demand for more revenue. Where were you in the Clark years? I dont recall your grave concerns about Labour’s greedy gouging of the power consumer. Why didn’t in 9 years Clark come up with something to ease the power increases they caused?

    The other countries cited have not switched from a competitive market back to a state controlled market – they have always remained in state control and so we dont have a freer market comparison to make in those markets. We do know that Contact Energy (fully private) offers the lowest retail prices compared to its SOE competitors. Electricity market activity now accomodates what was until now a rough bi partisan consensus that some version of competition is the norm. Its why Cullen never contemplated such a hairbained scheme because even he knew enough about markets to not spring nasty game changing surprises.

    What you socialists never realise in that in your political demagoguery (supposedly on behalf of the poor) you end up hurting the poor and others. Being forced to sell to a price controlled government agency is a green light to power companies to cease all new investment – because in the nasty evil capitalist world that you so despise, you dont needlessly risk capital investing in markets that are suddenly subject to distorting price controls. Capital is mobile and it moves to industries and national juristictions where there is a long history of stable predictable usually bi partisan consensus as to market conduct. This will restrict supply leading to brown outs as has happened in California where this sort of heavy handed regulation was implimented. Industries still buy on the spot markets and those markets wil be the most rapidly and dramatically hit by supply constraints leading to pricing volatility and higher than expected expenses that will be fed through to consumers by way of higher prices and inflation. Hiring a few Labour leaning economists at BERL does nothing more than put lipstick on this pig.

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  42. Akld Commercial Lawyer (160 comments) says:

    Also, to the person who asked about academic support for this attempt to drag us back to a command economy – please have a very close look at the track record of the academics in question. Sadly, not all academics are apolitical and some have some very odd ideas about the role of capital and labour in a functioning economy.

    To my observation, literally every single piece of “evidence” cited in support is fatally flawed, marred by a political mindset or has been cited rather selectively.

    As the head of NZIER said this morning, there is still work to do for the Electricity Commission and prices rises of any sort are tough for those on fixed incomes (particularly) but to pretend that you can make resource allocation decisions without proper price signals is just silly.

    This is just gutter politics and the Labour caucus should be embarrassed. And, when the media have finished with exposing the Emperor’s New Clothes, I expect that the electorate will struggle to take Shearer seriously again.

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  43. cha (3,779 comments) says:

    # insider

    I realise that so why their piss poor performance. Gouging by the generators, no never.

    /

    # slijmbal

    Me too but the cashed up capitalist in me says that this could well be an opportunity.

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  44. ross69 (3,652 comments) says:

    They want to see a transfer of wealth.

    I must confess I didn’t hear you complain when the government cut taxes for the wealthy. So I think we can conclude that you think transferring wealth to the wealthy is good but helping out the poor is bad. I suspect that attitude is shared by many on the Right.

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  45. Pete George (22,731 comments) says:

    ross69 – not taxing as much is less transferance of wealth.

    Your conclusion is as bad as your knowledge of taxation. Very few think the poor shouldn’t be helped.

    But most will agree they shouldn’t just help themselves (with the help of some parties) to other people’s money.

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  46. flipper (3,533 comments) says:

    Akld Queen Street…
    Excellent comment. Quite agree

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  47. ross69 (3,652 comments) says:

    ross69 – not taxing as much is less transferance of wealth.

    In English please. :)

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  48. Pete George (22,731 comments) says:

    Taxing is transferring wealth. Taxing less is transferring less wealth.

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  49. queenstfarmer (742 comments) says:

    ross69 (2,214) Says:
    April 19th, 2013 at 1:18 pm

    ross69 – not taxing as much is less transferance of wealth.

    In English please. :)

    Really, Ross? Tax = transfer of wealth. Less tax = less transfer of wealth.

    Still too complicated?

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  50. Rightandleft (627 comments) says:

    Strange that Labour seems to have such warm fuzzy feelings about the Muldoon era.

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  51. Islay Malt (2 comments) says:

    This policy announcement by Labour has cost investors hundreds of millions already due to the impact on share prices. Yet Labour has railed against finance company directors who have cost investors far less. The hypocrisy is astounding.

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  52. HC (152 comments) says:

    Well, so many emotive reactions and also blinkered views again.

    If it was that simple, then we may as well not bother having experts and people study and analyse matters. Perhaps inform yourselves before you come with arguments about “North Korea”, “Soviet”, socialist and what else comes to mind. The proposals are of course in some ways flawed, but they are based on approaches taken in many countries overseas – NOT North Korea, for sure.

    Perhaps listen to this interview that was on Nine to Noon today, with an overseas expert who analysed and reported on issues with the NZ electricity supply system:

    http://www.radionz.co.nz/national/programmes/ninetonoon/audio/2552518/the-labour-party%27s-new-electricity-policy.asx

    Maybe also read this article:
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10878516

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10878378
    (read especially the last sentence!)

    There is not just criticism directed at the Labour – Green power plans, there is also support, even from some experts and business leaders. The plan may need some additional fixes, to work as intended.

    What the policy announcement has certainly achieved is, it has torpedoed the partial share sales for Mighty River Power shares, and with that the part privatisation of SOEs.

    It will lead to a “wealth” shift from generators and retailers and their shareholders to the electricity consumers (incl. businesses), which naturally seriously upsets people holding shares, wanting to buy shares, and wanting to earn dividends for their own chosen spending or personal “investments”.

    Hence the angry reactions by the government and some business and investor circles.

    What is certainly needed is some more effective regulation of the electricity market, as so far, nothing has kept prices down sufficiently. The frequent switching by consumers just proves the dissatisfaction and desperation of many, now so frequently looking for any just slighly “better” pricing plan.

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  53. publicwatchdog (2,093 comments) says:

    What was broken back in the pre-Rogernomic$ days of the NZ Department of Electricity and local Power Boards?

    In those ‘bad old inefficient’ days – you could at least afford to have a heater on in winter and a soak in a hot bath?

    When you take an essential public service – like electricity – which is a ‘natural monopoly’, and introduce the ‘market model’ – all that happens is a duplication of resources and price increases for (residential) customers.

    The ‘market model’ for electricity has been a disaster for most NZ households.

    Who would take the slightest notice of ‘market maniac’ John Key?

    He was the former Head of Derivatives for Merrill Lynch, at a time that the market for derivatives was completely deregulated (repeal of the Glass Steagall Act in 1999), now look at the global financial meltdown, caused by the collapse of the derivatives market?

    Seriously folks!

    WAKE UP!

    Penny Bright
    ‘Anti-corruption / anti-privatisation’ campaigner.

    2013 Auckland Mayoral candidate.

    http://www.switchoffmercuryenergy.org.nz

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  54. OneTrack (2,563 comments) says:

    “. The frequent switching by consumers just proves the dissatisfaction and desperation of many, now so frequently looking for any just slighly “better” pricing plan.”

    Citation for that? I dont see many people changing suppliers and I don’t see “exorbitant” electricity charges.

    I do see the left on their next electoral bandwagon, bemoaning some issue that nobody really thought was an issue until then ie CGT, QA, etc. Another sliver bullet which will save us all.

    The other question, if the price of electricity is dropped enough (for the good of the people) and the county has to start injecting money in to them to keep them going, are the generators still to be considered “assets” ™. Or would they then be liabilities. Which means we should sell them.

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  55. HC (152 comments) says:

    OneTrack: Citation:

    “New Zealanders are increasingly taking advantage of greater competition and are switching companies for a better deal – in some cases, saving up to several hundred dollars a year.

    Since the Electricity Authority’s What’s My Number? campaign began in May 2011, there have been almost 700,000 consumer switches.”

    Quoted from Simon Bridges, Minister for Energy, see also link:
    http://www.beehive.govt.nz/release/opposition-power-plan-will-kill-competition

    Switches occur where consumers are not happy with power prices. An increase logically means increased dissatisfaction also.

    While NZ electricity retail prices for private households are internationally – within the OECD – in the middle range, the share of electricity costs compared to available net incomes will leave it in the more expensive range of countries. That naturally applies more so for low income households, which NZ has a high percentage of.

    See also for some useful stats and graphs, listing NZ amongst other nations:

    http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-south-africa-2013/electricity-price-international-comparison_eco_surveys-zaf-2013-graph46-en

    http://www.euaa.com.au/wp-content/uploads/2012/03/INTERNATIONAL-ELECTRICITY-PRICE-COMPARISON-19-MARCH-2012.pdf
    (see page 11, 3.3, where Australian electricity retail prices are shown in a graph, alongside NZ, US and sundry other nations and states; NZ can be seen in comparison there also)

    http://www.oecd-ilibrary.org/energy/electricity-information-2012_electricity-2012-en

    http://stats.oecd.org/index.aspx?queryid=27286

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