March 31, 2015 2:00pm by David Farrar

Nash says Labour should dump power policy

Labour’s controversial power-pricing plan is in the firing line, with energy spokesman Stuart Nash urging the party to dump the “questionable” policy.

The party is reviewing its manifesto after last year’s crushing election defeat. Nash is working on a discussion paper which proposes that NZ Power be dropped in favour of promoting cheaper solar power.

The brainchild of ex-finance spokesman David Parker, NZ Power would see the creation of a new state agency to buy electricity wholesale and bring down prices. It was announced in tandem with the Greens two years ago.

But critics said it would damage the renewable energy sector – and Nash, who took on the energy portfolio in November, agrees. He also believes the market is competitive.

“It will be my very strong recommendation that we drop NZ Power,” he said. “There are very few people that think it is a policy that’s needed in 2015. Maybe 10 years ago there was a strong argument for it, but not now.

Stuart Nash is 100% correct. Labour’s power policy was hideous. It was a de facto abolition of competition between generators, and nationalisation through price setting. It scared off any sane business leader from supporting them, as the precedent it would have set was horrific.

It was a policy you’d expect from UK Labour in the 1970s – socialist.

“We have got a regulatory framework – the Commerce Commission and the Electricity Authority – which is out there looking at predatory behaviour, and also with a strong mandate to foster competition . . . you could argue that the level of competition necessary to drive prices down is coming in.”

The authority recently noted there were 27 retailers in the market, with the bigger firms – Mighty River, Meridian, Genesis and Contact – losing share.

Energy prices fell by 0.6 per cent in the last year.

I want policies that promote better competition, not policies that abolish competition and have the state set the price for wholesale power.

Labour dumping this policy will help make them an acceptable competent alternative Government. Persisting with it will harm them.