Power companies hit the jackpot – New Zealanders pay the price

Alliance Party media release
FOR IMMEDIATE RELEASE
Monday 20 July 2009

The Alliance Party says that electricity price hikes are continuing to surge above the rate of inflation, siphoning money out of consumers pockets as winter grips the country.

Alliance Party energy spokesperson Ian Tinkler says that while overall inflation rose 0.6% for the June 2009 quarter, electricity prices increased an average 1.6%.

For the year power prices increased 5.4% nearly 3 times the inflation rate of 1.9% – despite the Commerce Commission revealing in May that the major power companies overcharged New Zealanders by $4.3b between 2001 and 2007.

Mr Tinkler says if the average power bill is around $200 per month in winter, a 5.4% increase collects over $15 million extra that is transferred straight out of New Zealanders pockets to fund the power companies "instant jackpot".

He says anyone else who wanted to make that kind of money for nothing would have to take out a Lotto ticket – but power companies were hitting the jackpot everytime they send out a bill to consumers.

"That is fifteen million dollars each month that is taken out of the community. It is fifteen million dollars that won’t be saved, as we are being told to do. It is fifteen million dollars that will not be available to put food on the table or pay family medical bills."

He says this is just the price increase in the latest quarter, with the surge in power prices outstripping the rate of inflation for the last 7 years.

"Meanwhile Labour and now National Government's have stood by and waved their hands while power companies press the go button on the money printing machine."

Mr Tinkler says in winter people need to keep warm, but with the high prices many people are going without – often the elderly, those on fixed incomes, the sick and struggling young families.

"It is a disgrace that despite hydro lakes being full power companies continue to ramp up prices. There is no justification for this. It is blatant profiteering."

He says that National and Labour have talked a lot about power prices but done nothing.

"Sadly we can't power the national grid from their hot air. So we need the Alliance solution of publicly owned power system under the control of New Zealanders to provide affordable electricity to all."

ENDS

*For the CPI release from Statistics New Zealand see http://tinyurl.com/mkdalj

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