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Sarah Free of the Domestic Energy Network. - Source: Breakfast -
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The Government's controversial state asset sales plan will today be debated in Parliament, bringing the partial sale of entities like power companies one step closer.
Prime Minister John Key is forging ahead with the plan after the second reading of the legislation was passed in Parliament by 61 votes to 59 last week.
The third reading today comes at a time when concerns have been raised that the partial sale of assets could see power prices rise.
Sarah Free, from the Domestic Energy Users Network, told TV ONE's Breakfast she thinks power prices will "definitely" go up as a result of partial privatisation, and in a significant way.
"What we have seen so far is that the Government-owned companies are in fact cheaper than all the privately-owned companies, up to 3.3 cents per kilowatt hour on average," she said.
Free said the Government-owned companies have some social responsibilities in the State-Owned Enterprises Act which keeps prices down, but this will go once they are sold to private companies.
"They are acting as a break on the prices that otherwise private companies would like to charge, they'd probably like to charge more."
According to the National Party there are 21 regions in terms of power, and in 14 of those regions privately-owned power companies were cheaper.
Free said while it might be true that in some areas a private power company could be cheaper for a particular customer and their circumstances what she is looking at is the average.
"This is going to affect all New Zealanders so it's only fair to look at the average figures," she said.
"And the Ministry of Economic Development data clearly shows on average the private companies are charging more that the Government-owned companies."
'Reliability is coming at a big cost'
Free said there is a lot of investment in energy developments and private companies rightly demand a return on that investment.
"It is giving us a more reliable energy supply, but that reliability is coming at a big cost to households."
"What we've seen is power prices have risen and they've risen and they've risen."
Free said the opportunity to switch power companies for a cheaper deal did not mean that a fairer price would be delivered, with even the best rates too high for many households.
State-Owned Enterprises Minister Tony Ryall denied that private electricity companies charge more than the publicly-owned companies on Q+A on Sunday.
"I've seen those numbers that have been quoted by the Green Party in that case, and what's clear in that is there are a number of private companies that are cheaper than the state companies," he said.
However, Green Party co-leader Russel Norman said Ryall "needs to look again".
"On average, privately-owned electricity companies charge 12% (3 cents per kilowatt hour) more than publicly-owned electricity companies.
"That's around $275 a year more for the average household.
He said power company Nova was an exception.
There is also evidence that the publicly-owned power companies force the private companies to charge lower prices than they would prefer to remain competitive, Norman said yesterday.
The legislation, which would allow for the partial sell off of state owned assets, looks set to become law by the middle of August.