April 24, 2012 4:06pm by David Farrar

Grey Power on power prices

Danya Levy at Stuff reports:

Residential consumers with state-owned power companies face on average a $265 a year increase in their electricity bills if the Government continues with its plans to partially sell them, Grey Power has told Parliament.

The Finance and Expenditure Select Committee is today hearing submissions on legislation to enact the Government’s controversial “mixed ownership model” and sell up to 49 per cent of Mighty River Power, Genesis and Meridian.

The Government also plans to reduce its shareholding in Air New Zealand but is not required to pass new laws to do so.

Grey Power spokeswoman Molly Melhuish said a Ministry of Economic Development comparison showed consumers with state-owned energy companies paid on average 3.31 cents less per kilowatt for their power than those with private companies.

That meant consumers with private companies paid $265 more a year.

I debunked this claim by Labour a few months ago.

Go to the Consumer Powerswitch site which has monthly data for the four main centres. Look at Auckland as that is where one third of the population is. Their estimated annual cost for a medium sized household (8000 kWh/year) is:

Genesis (SOE) $2,204
Meridian (SOE) $2,046
Contact (private) $2,020
Mercury/MRP (SOE) $1,953

Some of the other companies owned by the four big generators may charge more or less, but to state private pays $265 more a year is clearly false. Contact Energy is Auckland is cheaper than two of the three SOEs.

Also it ignores that people can swap. This is like arguing that because some banks charge more than Kiwibank, then all banks should be owned by the Government.

In Christchurch the prices are: