Power policy analysis finds 'no benefit'

Last updated 12:23 01/03/2014

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New analysis on the proposed NZ Power electricity policy has found it would have no overall economic benefit to the country.

But the Green Party says the report significantly under-estimates the gains it would bring, at more than $220 million a year.

The Infometrics report analysed the impacts of NZ Power on the wider economy beyond the electricity market.

The Labour and Green Party policy would require all generators to sell electricity wholesale to a state-owned buyer. It was said the policy would reduce households' retail electricity prices by around $300 a year.

The report said that would be outweighed by negative effects in other parts of the economy.

Lower prices would encourage more electricity use, which would give heavy users a comparative advantage over less heavy users.

This would require an extra 300 MW of generation capacity. Annual taxes would have to rise by $250 a household to compensate the shortfall in taxes. The result would be a net gain in real household spending of $120 a year.

But Green Party energy spokesman Gareth Hughes said the report tried to downplay the benefits.

Other reports have found the proposal would be unlikely to deliver a well-functioning electricity market. 

 

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- The Press

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