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Source: Reuters -
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The government has announced sweeping changes across the electricity industry aimed at generating more competition to bring down prices.
Power companies are also being forced to pay consumers the next time there's an electricity shortage.
It will be one of the biggest shake-ups of New Zealand's electricity sector in a decade.
Pensioner Heather Bloxham lives on her own but sometimes her monthly power bills are well over $200.
"They are just so high. It takes all my superannuation to get through the winter," she says.
And that's not surprising as power prices have increased by 72% in the last eight years.
But the government is now planning to curb that by creating more competition in the market.
A $15 million advertising campaign will be launched to encourage customers to switch companies.
Lines companies will be allowed back into the retail market.
And some assets will be swapped between major state owned power companies.
Energy Minister Gerry Brownlee says it's a bid to "balance" the state-owned generators.
"The SOE generators are not particularly well balanced. This is a small attempt to do some of that rebalancing," he says.
Currently, Meridian Energy has a monopoly in the South Island. But that could be about to change as two of its Tekapo stations will be transferred to Genesis Energy. And Meridian will take over the Whirinaki station in the North Island.
It's hoped the competition generates relief for consumers from rising prices.
But Labour claims the changes will make no difference.
"We don't think there is anything in a bureaucratic and asset reshuffle that will help hard working families struggling with high power bills. Power prices will continue to go up," says Phil Goff, Labour leader.
But what could make a difference is power retailers being forced to pay the consumer at least $10 a week when there's an electricity shortage.
Brownlee says ensuring security of supply will be achieved through initiatives such as forcing suppliers to pay their customers the next time they are called on to conserve energy or suffer power cuts in dry spells.
"This will force electricity retailers to manage their own risk, and means the risk of dry years will be diminished because power companies will be hit in the pocket when this occurs," Brownlee says.
"It affects not only the customers at the retail end but also very much affects the generators and retailers in the way in which they deal with their supply issues."
Governance of the industry will be streamlined with the Electricity Commission being replaced by a slimmed down Electricity Authority. Brownlee says the replacement authority will have a smaller mandate than the commission currently has.
The government claims the initiatives are all aimed at keeping the power switched on.
The Electricity Industry Bill will be tabled in the house on Friday and Brownleee says he expects it to be passed next October.
You can read the government's proposed changes in full
below:
Ensuring effective and stream-lined governance
pdf
Improving competition and restraining electricity price increases
pdf
Increasing security of supply pdf
What do you think about the changes? Have your say on the
messageboard below.
Add a Comment:
Post new commentte retard said on 2009-12-10 @ 00:46 NZDT: Report abusive post
Forget about the hope of Brownleee energy reform bringing you cheaper electricity prices. This WILL NEVER happen. Previous Nat govt promised the same thing when they deregulated the electricity market. The sad truth is that there is no competition in the electricity generation supply market. In a dry year, they all push up prices so no matter which supplier you turn to, you will get hit just the same.
Straight Shooter said on 2009-12-10 @ 00:23 NZDT: Report abusive post
Part of the answer to that question is the same reason why dairy products are also expensive - the products fetch a higher price the further away the market. The other reason for the high price is that the New Zealand electricity industry has 3 parts - North Island hydro, South Island hydro and North Island thermal. Each of these 3 areas of generation used to cover eachother during seasonal flows. By splitting ECNZ into 3 the risk increases prices and there is less incentive for new generatio
ErikBlood@xe said on 2009-12-09 @ 22:24 NZDT: Report abusive post
Sorry to shout, but the HUGE mistake the powers that be are making is cloaked as the benign sounding 'PM10' bill. Wee particles produced by wood burners are being blamed. What about diesel vehicles? As a result heat pumps which rely on old carbon fossil fuels are being promoted rather than the good old chippy. Short cycle carbon is renewable and sustainable. NZ is desperately short of power already. Easier and better to plant more trees than dig coal. Wrong policy, lets fight it!!
Arty said on 2009-12-09 @ 19:36 NZDT: Report abusive post
the further electricity is transmited,the greater the loss and the higher the cost . Why should I pay as much for my electricity as someone in Auckland when I live almost in the shadow of one hydro station and two geo thermal plants Cheaper power@source will see gravitation of bussiness and people to genration source and eliminate need for expensive pylons across Waikato farmland