Breaking up the old Electricity Corporation into a bunch of artificially competing companies has been a 15-year failure. They’ve poured heaps of money into competing with each other (despite mostly being owned by the same people, us), they’ve under invested, and prices have gone up fast.
What’s National’s solution to this failed National experiment (which Labour didn’t have the guts to fix)? Break them up some more. Try to create more artificial competition.
It ain’t gonna work. We’re a small country, power plants and lines are big pieces of investment. It’s a natural monopoly; there’s never going to be genuine competition. Efficiencies of scale will be lost and all we’ll get are more expensive ad campaigns where companies (still mostly owned by us) compete to try to sell us the same electrons. All chasing a myth (for which the review offers no evidence) that more ‘competition’ will bring down prices. Of course, it’s also a stalking horse for privatisation – the review suggests selling Whirinaki.
The real solution is to abandon any attempt at making competition work in a sector that is clearly not suited to it. Bring all the companies and regulators back together as one. Plan the bloody thing properly rather than hoping the invisible hand will guide us. Set the organisation a set of simple goals – reliability, sustainability, affordability, and get on with it. Drop all the marketing crap and let the electricity sector do what it should be doing – generating and delivering electricity.