Power prices

Stuff reports:

A new report by the Treasury claims private power companies offer the cheapest electricity in most parts of New Zealand, using the same survey that the Green Party claims shows the opposite. …

Last week, the Treasury issued a report that said recent analysis of the figures was “inappropriate”, because it used an average for the entire country, taking no account of regional price differences.

In other words, Treasury looked at the actual prices on offer to real people, rather than used a theoretical average that no one actually pays.

According to the Treasury’s figures, in 21 of 45 regions, private-sector companies were, on average, cheaper than the SOEs, including those in seven of the 11 largest regions.

Private-sector companies had the cheapest offerings in 29 of the 45 regions, the Treasury says, and were the second-cheapest in another six.

“In our view, the assertion that SOEs offer cheaper prices than private companies is not supported by the evidence,” the report says. “In any case, what matters is not ownership – it is . . . the level of competition among retailers.”

This is the key point. You can choose between six to 12 retailers in most areas. And hundreds of thousands of people are choosing and swapping each year.

In Auckland the cheapest retailer is the privately owned Pulse. They are $250 a year cheaper than Govt owned Mercury. Contact is $200 a year cheaper.

In Christchurch the average charge ranges from $1,950 to $2,600 with private companies being the cheapest and most expensive. It is about choice and competition – not ownership.