Greypower hypocrisy

September 16th, 2013 at 3:00 pm by David Farrar

TOTD 14092013

 

Keeping Stock blogged this exchange.

I’d love someone to ask how they managed to get a discount from an evil privately owned electricity company, yet failed to get a discount from those nice benevolent state owned power companies!

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20 Responses to “Greypower hypocrisy”

  1. burt (8,275 comments) says:

    Older people should remember what a mess this country has been in the past when state run monopolies existed for everything we needed….

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  2. m@tt (629 comments) says:

    Pulse are 70% owned by the Buller Electric Power Trust
    “The Buller Electric Power Trust was established by deed on 18 May 1993 to enable the Trustees to acquire all of the shares in Buller Electricity Ltd. The object of the Trust is to hold the shares in Buller Electricity Ltd on behalf of the Consumers of the Buller, and to distribute to the Consumers in their capacity as owners, the benefits of ownership of those shares.”

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  3. bhudson (4,740 comments) says:

    I think this deal is more evidence of the neoliberals extorting monopolistic rents from the citizens of NZ by offering them discounted prices and lulling them into a false feeling of satisfaction by charging them less than they would pay elsewhere.

    It’s absolutely evil personified I tell you, and David Cunliffe will put a stop to it!!

    Under the single buyer model, Greypower members will be able to pay more for their power. Just like the rest of us.

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  4. Rex Widerstrom (5,354 comments) says:

    Perhaps because the presence in the market of players not driven by shareholder demands for ever-increasing dividends helps keep prices low, even if in this case the government-owned entities typically have higher overheads (due, no doubt, to a surfeit of “managers”).

    There is no denying that total privatisation of the energy sector has led to negative outcomes wherever it has been tried. Victoria did it in the early 1990s (so there’s plenty of long term trend information) and the result has been:
    – Electricity prices outpacing inflation, increasing by 170 per cent compared to a 60 per cent increase in the consumer price index.
    – Since June 1995, productivity in electricity, gas and water had declined by 24.9 percent while all other Australian industries saw an increase of 33.6 percent.
    – Managers in the electricity sector had increased by 217 per cent since 1997, while frontline staff such as technicians and trades workers have only increased by 28 percent. And sales people – selling an essential product no one can be without – jumped from 1,000 to 6,000.

    This disaster hasn’t deterred other states from stampeding down the same path. In NSW in 2010-11 prices went up 23 percent while the national price rose by 16 percent. South Australia privatised in 1998 and experienced both an increase in electricity prices and a substantial loss to the public. And so on…

    The result of all this is that on average Australians pay 130 percent more for electricity than Canadians, and 70 percent more than Americans.

    The Energy Users Association of Australia – which represents 100 big power users including BHP, RailCorp, Coles, the Commonwealth Bank and Brisbane City Council, so we’re not talking some mad left wingers here – have pointed out that Australian households pay more than those in Japan, US, Canada and the average of the EU and demanded reform (with, of course, an eye on their own operating costs… but making it affordable to do business is also an important consideration of government).

    Carbon Market Economics’ comparison of prices in 92 jurisdictions – including more than 35 countries, American states and all Australian states and territories – found NSW ranked fourth behind Denmark, Germany and South Australia. Victoria was fifth and Western Australia was sixth.

    A very thorough report of the proposal by the Newman government to privatise Queensland’s electricity sector is available online and concludes:

    …whereas reform was expected to result in lower prices, the actual outcome has been a near-doubling of real prices in most Australian markets. This outcome has occurred regardless of whether electricity assets are publicly or privately owned, but evidence suggests that the outcomes have been worse under privatisation. [my emphasis]

    What’s occurring is that governments, desperate for the quick hit of cash that comes from an asset sale, are prescribing a skin graft without first treating the gangrene and then wondering why the whole thing turns out to be rotten in a few months or years.

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  5. Keeping Stock (10,342 comments) says:

    The real irony of course is that whilst Grey Power claims to be apolitical, its president Roy Reid was the name behind the LabourGreen asset sales referendum petition. Yet Grey Power then goes off and does a deal with the devil; a company which describes itself on its website as a “majority New Zealand owned, independent electricity retailer”.

    Grey Power is trying to run with the fox and hunt with the hounds. Full marks to them for getting a good deal for the membership, but it flies in the face of their opposition to partial privatisations.

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  6. Bob R (1,376 comments) says:

    ***Older people should remember what a mess this country has been in the past when state run monopolies existed for everything we needed….***

    @ Burt,

    Can you explain how it is more efficient where you have a natural monopoly (eg. electricity supply)?

    The residential electricity prices since 1999 suggest, if anything, privatisation has accelerated price increases.

    http://transportblog.co.nz/wp-content/uploads/2013/08/New-Picture.jpg

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  7. Keeping Stock (10,342 comments) says:

    @ Bob R; a monopoly is precisely what LabourGreen is proposing with NZ Power

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  8. quinnjin (24 comments) says:

    So they got a deal that is cheaper when compared with other extortionate prices. We pay too much for power in this country. It’s a huge earner for who ever owns utilities, which is why private interest always hungrily eyes them, and will say and do anything to get it’s hands on it.

    This doesn’t change the irrefutable reality that privatising power leads to higher prices. Duncan Garner is an idiot. His comment is facetious and childish.

    Of course you go for the best deal you can under the current system, that doesn’t change the reasons for which you advocate for reform…

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  9. Cunningham (844 comments) says:

    quinnjin the current system works pretty well. Our power is reliable and we have a large proportion which is renewable. Do you honestly think their policy will work? How will it encourage anyone to invest in new power generation? Not to mention the fact that with their beefed up ETS, how will this ensure power prices stay low? Labour and the Greens have no idea and even the person who they quote as being their major inspiration for this trainwreck policy thinks they are nuts!

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  10. burt (8,275 comments) says:

    Rob R

    The residential electricity prices since 1999 suggest, if anything, privatisation has accelerated price increases.

    What happened in 1999 ??? Oh that’s right – we had a government who wanted us to think they were punishing the rich while also taking record profits from power generation … why – well it’s obvious really – they needed so much revenue to fund their crazy spending….

    Please explain what a natural monopoly is – other than something the government can use to raise revenue even when it’s hurting the lowest income earners the most….

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  11. Fentex (980 comments) says:

    While at first blush this may seem like an act of hypocrisy I don’t think it is.

    Making rational choices and prudent financial decisions in the prevailing environment is rational and does not make a statement about how one may wish the environment to be.

    One may not have the choices one wished one did have while being compelled to manage one finances as best as one can.

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  12. burt (8,275 comments) says:

    Fentex

    It shows their alignment to the Labour party – do as we say not as we do !!!!!!!

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  13. joana (1,983 comments) says:

    They are older than you , they can do what they like..They are just trying to do the best for the members. They don’t have to answer to bimbos like Garner.

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  14. Paulus (2,628 comments) says:

    Grey Power are a bunch of Hypocrites led by a vociferous left wing minority.

    Best friends of Winston too – that is where he gets many votes from.

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  15. Bob R (1,376 comments) says:

    ***What happened in 1999 ??? ***

    @ Burt,

    That is when the reforms came into effect. I don’t know if the intent was to drive up residential electricity prices but that is what has occurred according to this graph of prices from 1974-2012.

    http://transportblog.co.nz/wp-content/uploads/2013/08/New-Picture.jpg

    A natural monopoly is a monopoloy in an industry where it is most efficient for production to be provided by a single firm. Electricity production is a classic example.

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

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  16. slijmbal (1,236 comments) says:

    @Rex

    NZ Power industry is very partially privatised and power costs have risen substantially above inflation as a result of a predominantly state owned industry. The state owned approximately 70% of generation, all national transmission and a similar 70% of retail customers based on my back of a fag packet calculations.

    I had some involvement in several power companies when the various restructurings occurred and those in the industry believed it was broken back in the good old days of fully state monopolies. Some basics like industry subsidising retail prices, massive duplication of processes and systems across very small power companies, quality, service levels and standards being an arbitrary and unregulated outcome of whoever ran the companies. I am not convinced the current approach is any better because of continued effective state control but let us not pretend that the state owned monopoly approach is somehow the better option. History does not back that up.

    The model has been one of a state monopoly busy rogering the retail customer for 15 years. It’s bollocks to think state ownership magically leads to lower power prices. Quite the opposite in NZ.

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  17. Johnboy (16,597 comments) says:

    You cheeky young whippersnappers you!!!

    You forget we all died in the trenches so you could survive and you owe us all cheap electricity and everything!! :)

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  18. MT_Tinman (3,190 comments) says:

    Rex Widerstrom (5,041) Says:
    September 16th, 2013 at 3:41 pm

    There is no denying that total privatisation of the energy sector has led to negative outcomes wherever it has been tried.

    There is a great deal of denying exactly that Rex.

    In fact the evidence demonstrates exactly the reverse with State controlled energy companies wasting their stolen resources at almost every opportunity.

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  19. Sir Cullen's Sidekick (890 comments) says:

    Time to raise the tax on these rich pricks now….Go Curryleaf…you are the man….

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  20. Lance (2,655 comments) says:

    Hell.. power infrastructure is so cheap. Of course it’s all thieving by the faceless oligarchy.

    It didn’t cost $700,000,000 dollars to upgrade the Cook Strait cables, of course not, just rich prick propaganda.
    Power transmission is free man, just like the incredible low price of new power generation.

    Labour will make power cheap, force crippling price controls and keep the power flowing. Nothing to worry about here, move along.

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