Power price rises more than double the inflation rate

Power prices have risen at more than double the inflation rate since National took office, showing National’s hands-off approach to the electricity market is a failure, the Green Party said today.

The Consumer Price Index (CPI) rose just 1.0 percent in the year to September while power prices rose 3.7 percent. Since December 2008, when National took office, power prices have risen 24.6 percent and the CPI has risen 11.8 percent.

"New Zealanders know that our electricity market is not working when power prices have doubled in 15 years, even though demand is flat or falling,” Green Party Co-leader Metiria Turei said today.

“Kiwis have just had a guts-full of price rises when power companies are reporting flat or falling demand for power,” Mrs Turei said.

“The irony is, power use is falling, but prices are still rising. Something in the market is clearly not working.

“Now we have the chairman of Auckland lines company Vector, Michael Stiassny, warning customers to get used to power cuts like the blackout that affected so many Aucklanders this month, as it will cost too much to install fully reliable systems.

“National has been arguing that the reason families are locked into this never ending spiral of upward power prices is to ensure we have security of supply, but it seems we are not even going to get that.

“The power companies are making exorbitant and ever-increasing profits. In a true market, when sales fall, a company’s profits go down, but in this case they just hike prices regardless and families have no choice but to pay.

“Today, we have energy poverty to the extent that 41,000 families were disconnected because they were unable to pay their power bill last year.

"Something has to change. Excessive electricity prices are a deadweight on our economy, which costs businesses and jobs, and is a drain on strained family budgets that results in cold, underheated houses.”