More on electricity prices

August 19th, 2014 at 10:00 am by David Farrar

electprices

An interesting analysis of the Electricity Industry by the Electricity Authority. I blogged yesterday on how price rises are faster than inflation, but lower than in previous years. This graph shows that the competitive market side is working well. The costs increases are on the sides that are price regulated. To be this demonstrates that Labour’s policy of getting rid of the competitive market in generation is absolutely the wrong thing to do.

The analysis shows that the competitive component of were rising at an annual rate of 7.1% prior to the What’s My Number campaign, but since the campaign the annual rate has fallen to only 0.5%, which is well below the CPI inflation rate.  So the focus should stay on better competition, rather than less competition.

I’ve just swapped power companies because my body corporate has signed up for an exclusive deal for power from a retailer. By bulk purchasing for the complex, we get around 2c a unit cheaper. It’s a good example of competition at work.

 

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5 Responses to “More on electricity prices”

  1. burt (8,323 comments) says:

    KiwiPower will get that blue band nice and thick again. Relax, one choice will be available and it will be illegal to report this sort of information in the glorious socialist future of NZ.

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  2. Jimbo (43 comments) says:

    There was a major reason that the energy component went up so much under Labour.

    Basically, Labour allowed Meridian to mismanage the water storage badly, which allowed Meridian to make excess profits. As the 100% owner of Meridian, the Government was able to pocket those profits and waste them on any number of things that we now recall with such distaste.

    Under National there have been at least two years where the water inflows have been as bad as the worst years under Labour, but, guess what, no crazy price increases. The reason for this is that the electricity rules now penalise retailers if customers have to conserve water as a result of poor management of the water supplies. The splitting of the Tekapo stations has helped too.

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  3. ross411 (881 comments) says:

    Jimbo (41 comments) says:
    August 19th, 2014 at 10:18 am
    There was a major reason that the energy component went up so much under Labour.

    This sounds interesting, but confusing. Can you link to something which goes into detail?

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  4. burt (8,323 comments) says:

    ross411

    Detail…. It’s different when Labour gouge low paid workers for state profit. Lets be real here, the entire funding of the Labour party relies on money paid by the lowest earners to fund the highest earners – so that the high earners don’t need to pay for their own advertising.

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  5. SPC (5,787 comments) says:

    Re change in the market price for electricity over the years, the major factor is probably cost of new supply to meet higher demand and or regulatory change (impacting on the source/type of the power supply). At the moment there is sufficient supply but once that changes the price will go up and the how much determined by regulation impacting on the type of power supply generated.

    Transmission costs have been increasing – investment in the network and distribution (new smart meters etc).

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