Power Prices

Labour’s at it again, with Grant Robertson blogging:

Today I spent some time with the residents of one of the Council housing blocks in Wellington.  I really enjoy my catch ups with these groups as they give me a regular update on what matters to people who come and go on very modest incomes. And there was one resounding message.  Coming out of winter the biggest issue is power prices.  These folk are watching every dollar, and they see the moves up and down.  This has been a hard year and looking back over the last few years the increases have been large. They are not necessarily up to date with moving between companies, and the companies are generally not chasing them.  They do wonder why the government is taking such a big profit from the power companies it controls on the public’s behalf.

I’ve dealt before with the hypocrisy of taking $3.1 billion of dividends in a time of massive surpluses, and then complaining about more modest dividends in a time of huge deficits.

But today I want to look at power prices itself. Luckily the CPI has a section on domestic power prices, so one can calculate average increases each year. And here is what it has been:

  • 2002 7.2%
  • 2003 9.1%
  • 2004 8.8%
  • 2005. 4.4%
  • 2006 7.8%
  • 2007 6.2%
  • 2008 7.9%
  • 2009 2.3% (for three quarters)

So since the election power prices have gone up 2.3% on average and according to Grant this is the biggest issue.

As even Grant acknowledges there have been large increases for many years. Including when Grant was effectively the Deputy Chief of Staff in the PMs Office. Did Grant use that position then to advocate for lower power prices? Did anyone say “Hey Michael, our surplus is almost $10 billion, so why don’t we ask the power companies we own to reduce their profits?”

So let me see if I have Labour’s position summed up well:

  • It was okay to take $3.1 billion in dividends from state owned power generators, during a time of huge Crown surpluses, but we are now very sorry about it.
  • Now when the Crown is borrowing $250 million a week is the right time to reduce the dividends, so even more money than $250 million a week needs to be borrowed
  • A 2.3% increase in power prices since the election is the biggest issue facing most households
  • Hope people forget that power prices in the last seven years of Labour went up 64%, an average of around 9.1% a year.

I really hope Labour keep campaigning on power prices. I’m never going to get sick of reminding people of this.

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