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Chris Ford: Gerry Brownlee Should Make Power Companies Cough Up!

Chris Ford
Chris Ford

This week's Commerce Commission report into power company price fixing arrangements simply verified something that we knew all about as consumers but which the power companies have been denying to us all along - that they have been fleecing us to the tune of $4.3 billion over the last seven years (and perhaps more.) Now it's time to pressure Energy Minister Gerry Brownlee to change his tune and ask the power companies to cough up those billions of dollars.

While the Commerce Commission report was a long overdue and welcome admission, Gerry Brownlee's refusal to ask the power companies to pay consumers back was really not good enough. Yes, the Commerce Commission said that the power companies had not broken the law as they used their legitimate market power to leverage prices and profits up but in doing so, they had overcharged consumers and this was the un-ethical matter in their view.

Of course, since Max Bradford's electricity reforms of the 1990s, we have been subjected to this legalised theft of our money via awfully high electricity charges. Perhaps Gerry Brownlee should be reminded of one thing - that under our unwritten constitution, if Parliament has the power to make such laws, then it has the equal ability to amend or scrap them and replace them with something better.

In this case, Gerry Brownlee would be best advised to consider a law change to make the power companies pay back their ill (but legally) gotten gains to consumers. The rate of refund should be set at a fair price so that all business and particularly household customers benefit. I would dare say that some people (particularly pensioners, beneficiaries and low-paid workers) would welcome a cash refund cheque in the post, especially in these hard times! Furthermore, any pay back from the electricity companies would act as a form of economic stimulus as low income earners tend to spend and not save their money.

Instead, Gerry wants to protect the interests of the power generating SOEs who have been directed to produce larger dividends, alongside other SOEs, in order to generate much needed revenue for the deficit-plagued and income tax starved Crown accounts. Besides, the one privately owned generator, Contact Energy, has one very famous shareholder too, Gerry Brownlee (who stated that he had put his Contact shares into a blind trust while in opposition.)

In effect then, we are faced with the reality that Gerry and the National Government (without the application of electoral pressure) are not going intervene beyond merely 'asking' the power companies to hold their prices until after September when the official electricity sector review group is due to report. As I have opined in a previous blog on this issue, I don't expect anything new to come out of the report's recommendations either. It will likely just contain the same old veritable stew of free market ideas to further deregulate the power industry by further extending private sector control over it. If this is the case then it will get us nowhere.

And as for Labour's response to the Commerce Commission report, it was laughable and further illustrates how inept the party currently is in opposition. Charles Chauvel, the party's energy spokesperson (and a person whom I met while he was Labour Youth president 20 years ago) stated that the report was correct and that people were worried every time they turned on the heater! Damn right they are, except that Labour while in government shied away from re-regulating the sector, meaning that we ordinary consumers were slammed with the un-necessary charges the Commerce Commission report talks about. Talk about hypocrisy!

Ideally, I still say that if we collectively pressured Gerry Brownlee, then he might still see sense. I believe it's time to start actions like a petition drive and protests outside National MP's electoral offices to make them see sense (and perhaps people might like to drop by Labour MP's offices too and remind them of their role in all this.)

If this happens, then it could be genuinely power to the people and not power to the electricity companies that wins the day!

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