Shearer: Electricity market is 'broken'
The electricity market is "broken" and prices should be coming down, rather than going up, says Labour energy spokesperson David Shearer.
Yesterday the Electricity Authority (EA) said it would be investigating the "blame game" power companies use to justify putting up prices. Retailers say they are just passing on price hikes from lines companies, but both Mr Shearer and the EA say the new prices exceed the increased costs of distribution.
Mr Shearer says members of the public have written to him saying their monthly bills are going up 11 percent. Green Party co-leader Russel Norman posted a photo on his Facebook page yesterday of a letter from Meridian, advising a customer their bill will be going up by 24 percent.
"We shouldn't be having power increases at all at the moment because power is in abundance," Mr Shearer said on Firstline this morning.
"We've got an oversupply of power at the moment, and demand is flat. Now the market would tell you that prices should come down, rather than go up."
The EA put out its statement after Mr Shearer announced he had drafted a member's bill that would force electricity retailers to spell out each component cost on customers' bills.
"They can't actually see what's responsible for taking that price up – is it the power companies? Is it the lines companies like Vector or Orion, or whatever? Is it Transpower, the company that manages our grid? You can't see it, there's no transparency.
"So this bill will actually break it down so we can actually have an opportunity to say it's the power companies or it's the lines companies that's most responsible for putting that price up."
He says this way, customers will be able to see when their retailer has hiked up the price unreasonably.
"I think it suits a lot of the power companies to have a very vague and foggy system where prices can be in a sense blamed on other parts of the system," says Mr Shearer.
"I don't think it's fair on consumers not to be able to see where the power increases are coming from."
If elected, Labour and the Greens have promised to reform the electricity market by introducing a single buyer, that will use its dominance in the market to bring prices down.
The Government has dismissed the plan as "truly wacky".