PM defends rising power prices

Last updated 08:25 10/03/2014

Relevant offers

Prime Minister John Key has defended rising power prices, saying the increases would be greater under a Labour Government.

Consumer NZ figures show that in some parts of the country people on pre-pay electricity plans could be paying up to 60 per cent more for power than those paying a regular power bill.

Figures showed families in Northland paid up to 42 per cent more on pre-pay contracts, while those in Dunedin paid 58.7 per cent more. In Invercargill it was 60.8 per cent more.

In some cases customers on the cheapest pre-pay plan were paying over $1500 a year more than those on the cheapest standard plan.

This morning, Key said he would need to look at individual circumstances before commenting on the reason for the price differences.

"But what I do know, is we've tracked power prices for the entire time we've been in government and we compare those to what happened under the previous administration," he said on TV3's Firstline.

"They've been going up slower."

He said lines maintenance and network upgrades had driven the rise in power prices.

"Now, the counter argument to that is if they don't invest in that infrastructure, then we have that massive power outage like we had in Auckland.

"In the end, if there was a problem and Transpower didn't upgrade their lines and their grids, and the power all fell out, [media] and rightfully so, would be screaming at the Government about why isn't the power there."

Labour energy spokesman David Shearer said it was "wrong" that it was often the poorest families forced onto pre-paid contracts.

"Nearly all of those families are obliged to go on pre-pay schemes by the power companies because they face difficulties making ends meet and have fallen behind with payments in the past," Shearer said.

"They're essentially forced to feed the meter to stay connected.

"Given they are paying upfront - and are no risk of defaulting to the company - you'd expect pre-pay users to get a reasonable deal. Instead our power companies are charging them massively more than other customers because they have nowhere else to go. They also don't get access to special deals or discounts."

Shearer said the Government's partial-privatisation programme - stakes in state-owned power companies Mighty River Power, Meridian have been sold and Genesis shares will be on sale shortly - would only drive prices up further.

"It's heartless and unnecessary," he said.

"This Government knows it has been going on but has done nothing to bring the industry into line."

Key said the Opposition "will make all sorts of claims".

Ad Feedback

"But remember only this: their record was far worse," he said.

"Power prices went up 72 per cent in the nine years Labour were there, their emissions-trading scheme Labour and the Greens wanted to put on added a huge amount to power, and all of the analysts' reports on their power policy is that it will add to costs, not reduce costs."

The Labour-Green NZ Power policy, announced almost a year ago, would create a single buyer for electricity to keep prices tied to the cost of production.

- Fairfax Media


Special offers

Featured Promotions

Sponsored Content