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Nats lied – power prices to rise

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:

Power price comparisons wrong: English

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.

Ministers dismiss energy pricing analysis

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?

36 comments on “Nats lied – power prices to rise”

  1. higherstandard 1

    The question that really needs to be asked is why are power charges considerably less over the other side of the Tasman ?

    • Kotahi Tāne Huna 1.1

      The question that must be asked first is: do you have a source for that, since here’s one that flatly contradicts you.

      • Chris 1.1.1

        That link doesn’t seem too accurate. It has the cost of an internet plan in NZ with 6mbps and unlimited data at US$49.95 per month. If that is a real plan could someone let me know who for so I can change to it.

        Edit: Don’t worry just found out anyone can change the information in there.

    • Lanthanide 1.2

      Could be something to do with them getting most of their power from coal. Just a guess.

      • tc 1.2.1

        Also they lack all the expensive ‘compliance’ that strangles each component here we had a More cost effective system under the old NZED.

        The shitfights between grid and lines companies, the laughable retail structure and more.
        Private interests wants the maximum return possible rather than strengthen the network and then you have 3 sets of auditors and matching legal bandwidth to protect your arse.

        • Draco T Bastard 1.2.1.1

          Yep, private competition drives prices up due to duplication of bureaucracy, increased auditors for compliance and then there’s the dead weight loss of profit.

    • Dave 1.3

      They aren’t, they are much higher, especially considering that GST is higher here. They will be going even higher with the carbon tax too.

  2. marsman 2

    ‘Is it even news when this government lies these days’- They have been lying since before they slimed their way into power. It would be news if they actually told the truth about something, anything. Wonder how their children will turn out with parents who lie for a very comfortable living, something for them to aspire to?

  3. Tracey 3

    But it’s just a lie. Contrarian yesterday spent alot of his day on another lie saying “who cares.”

    They lie and lie with impunity. It would be great to get a whistle blower revealing exactly how much Nation spends on pr advisors etc…,

    yet again, well done the GREENS, Labour continues to coat-tail them, but they are leading the challenge of this government on FACTS

    • Because a white lie to a small town newspaper in America is a complete
      non-event you worthless ass-hat.

      Oh yeah, and go fuck yourself clownshoes.

      [Contrary is fine. Mindless personal abuse isn’t welcome. r0b].

      Fuck off Rob.

      • Kotahi Tāne Huna 3.1.1

        I suspect this may be a short conversation, but whatever you think about yesterday’s lie, this one is significant, and seems to have been repeated in Parliament.

        • TheContrarian 3.1.1.1

          Yes, this one means something. A single comment, unquoted and out of context means very little. You worthless cretins should know the difference.

          • Pascal's bookie 3.1.1.1.1

            For a post-grad politics type person you sure are ignorant about politics.

            Having my doubts about your honesty old bean.

            • TheContrarian 3.1.1.1.1.1

              Luckily it matters not whether you believe me or not.

              What the fuck do I care about some nameless wretched scumbag with shit for brains questioning my studies?

              Believe what you will, old bean. 

              [TheContrarian is clearly aiming for self-inflicted martyrdom, and I am happy to oblige. You’ll be welcome back in a week if you want to be contrary without the potty-mouth. r0b]

  4. shorts 4

    does anyone think for a second the public believe(d) the line that prices wouldn’t go up?

    except for the faithful media reporters who couldn’t ask an insightful question if it was written down for them

    Still maybe they’ll drop when the Bluff aluminium smelter closes due to a huge over supply

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10826027

  5. AmaKiwi 5

    How stupid does a government have to be to sell its infrastructure! Calling power companies “assets” is a public relations trick to make them sound like shares.

    The only conclusion I can come to is Key & Co. are stupid or thieves. Please, someone offer another explanation. (P.S. Since they are getting away with it, I am not inclined to think they are stupid.)

  6. AmaKiwi 6

    David Parker, get some balls.

    Don’t say Ryall’s statement was “outrageous,” say Ryall is a “Liar.”

    That would get a headline and some debate in the media.

    Too much pussyfooting by the Labour front bench . . . as usual.

    • Tom Gould 6.1

      AmaKiwi, there was once a time when a senior Minister lied to the House and to the media they would have been ridiculed and lost their job. Seems lying is commonplace with these Tories, it is no longer news. The MSM is so embedded with these Tories now, they are actually part of the deception.

      • Matt 6.1.1

        NZ government consistently ranks high in perceived “transparency”, only after living here a few years does it seem clear what that meant.

    • tracey 6.2

      I thought transparency was having more than one family?

  7. captain hook 7

    of course power prices will rise.
    how can they make any money if they dont keep raising prices.

  8. Dave 8

    There is some egregious selective quoting going on there. Ryall said in Parliament that the error about the number of customers – “the calculations assumed Mercury Energy has 19,188 customers when, in fact, it has 364,600 customers” – was only one of a number of errors, and that “taking into account the full range of payment method and payment time discounts—and, frankly, in the real world that is what you do—officials advised a different result. Those figures [government-owned vs privately-owned retailers] are $2,113.60 and $2,101.60. The private electricity companies are cheaper by $12 a year”.

    • Draco T Bastard 8.1

      You’re talking out your arse. The OIA information has the Treasury saying that the research wasn’t far wrong. The private companies were still significantly more expensive than the SoEs.

      • Dave 8.1.1

        The parts I quoted are what Ryall actually said in Parliament on the 20th of June, according to Hansard. He said he was relying on two pieces of advice from the Ministry of Economic Development, not Treasury, so those are the documents that should have been OIA’ed.

        He also said “Using the assumptions made by Mrs Melhuish, and correcting the errors, the latest available data, I am advised, has the two figures as $2,113.60 and $2,332.00. ” In other words private companies were $218 more expensive by that measure, but taking prompt payment discounts etc. into account, they were cheaper.

        • Draco T Bastard 8.1.1.1

          The SoEs also have prompt payment discounts etc so it still sounds like the private companies are more expensive.

          • Dave 8.1.1.1.1

            Contact’s discount is 22%, much higher than Meridian which is around 10-12% as I recall. Coincidentally the price difference before discounts ($218) is around 10% of the yearly total.

            • Crashcart 8.1.1.1.1.1

              Prompt payment discounts only make power bills cheaper for those who earn enough money to ensure the power can go out straight away. As usual those on lower incomes living week to week often get behind and so pay more for their power. Yea really fair of the government to take into account those prompt payment discounts when deciding on policy that takes assets away from those same low income earners to sell to rich ones.

  9. Tracey 9

    It’s often been said that the discounted rate is the actual rate, if you like, and those who don’t pay early get penalised… prettily packaged the other way round…

    • crashcart 9.1

      Never made much sense to me that those who are struggling the most have to pay more. Even from a buisness sence. If a person can’t pay the discounted rate what in the hell makes them think charging a higher amount is going to allow them to pay. It’s like punishment for earning less as though earning less isn’t punishment enough in itself.

  10. captain hook 10

    they lie about everything.
    you cant flog a dead horse to a texas ranger unless you lie.

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