Written By: - Date published: 9:08 am, August 15th, 2012 - 36 comments
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Privatising our power companies means higher power prices for everyone (even “mums and dads”). This makes obvious sense – private companies are all about profit. And there’s data to back it up. Labour and the Greens have been pushing the message that private power companies charge about 12% more (as we’ve covered before). The Nats tried to brazen it out:
Claims that privately owned power companies charge the highest prices are wrong, the government says. … Acting Prime Minister Bill English says Treasury’s figures have been taken out of context.
“The calculations you are seeing, trying to say SOEs have lower prices, are simply wrong,” he told reporters on Tuesday.
The Greens have accused the Government of “bullying” energy analyst Molly Melhuish over her calculations which suggested state-owned power companies were cheaper.
Mrs Melhuish made a submission on the Government’s “mixed ownership model” legislation this year in which she said the partial privatisation of Mighty River, Meridian and Genesis was likely to result in higher power prices for customers.
In support of her argument she provided analysis showing that state-owned power companies on average – and “weighted” for customer numbers – charged about 12 per cent, or $240 a year, less than their private-sector counterparts. She later updated that figure to $265.
Labour and the Greens cited Mrs Melhuish’s analysis in their attacks on the asset sales programme but her work was dismissed in Parliament by Energy and Resources Minister Phil Heatley and State Owned Enterprises Minister Tony Ryall.
Unfortunately for the Nats, official documents prove them wrong. The second piece above continues:
However, in a June 8 report to Mr Ryall, Treasury said Mrs Melhuish’s conclusion of an annual average $240 difference between state-owned and private companies’ charges “appears broadly accurate”.
In the report released to NewsTalkZB this week under the Official Information Act, Treasury noted that Mrs Melhuish erred by understating the number of customers of Mercury Energy, but said that “does not materially decrease the $240 figure”.
In spite of this advice, Mr Ryall told Parliament on June 20 Mrs Melhuish’s error “makes a material difference to the weighted result”. Yesterday Mr Ryall stood by his answer, saying: “Advice on the day from both MED and Treasury is that her conclusion is wrong”.
But Treasury’s advice to Mr Ryall that day was that Mrs Melhuish was just $23 out and SOE power companies charged $242 less on a weighted average basis.
Labour’s finance spokesman David Parker said it was “outrageous” for Mr Ryall to claim Mrs Melhuish’s figures were wrong “when in fact she was right and he knew it”.
Furthermore, Mr Parker said it appeared that National Party members on the finance and expenditure committee which considered the Government’s asset sales legislation had voted to report the bill back to Parliament early, “in order to prevent Opposition members getting Treasury advice as to whether the assertion by Molly Melhuish was correct”.
Turns out that common sense is right – private power companies charge more. Privatisation surely means that prices will rise. Is it even news when this government lies these days?