Businesses facing contract renewals for their electricity supply are in deep trouble, the Employers & Manufacturers Association says. Competition in the electricity market is now virtually non-existent with the price of
power peaking 500 per cent higher than a few months ago.
"It's frightening that there is no theoretical or practical limit to how high the price of power can go," said Alasdair
Thompson, EMA's chief executive.
"New Zealand must embark immediately on an incentivised national power saving campaign.
"A survey we undertook of our members and other information shows that when businesses power supply contracts come up
for renewal they are being told they have to pay anywhere from 30 per cent to 500 per cent more for power.
"They are told they have to pay the extra for the next two to three years, regardless of any change in conditions that
may occur in the meantime.
"Several retailers have withdrawn from the market, including Meridian, Trustpower and On Energy.
"Mighty Power and Genesis are telling their customers to take what they're offered, or pay the spot price. The spot
price is fluctuating up to five times the price of a few months ago and five times higher than last winter.
"The state owned power companies are benefiting hugely; the Government's accounts will be pumped up as a result.
"Minister Hodgson is still in the mode of blaming the previous Minister for the problem. His assurances that all will be
well when his new legislation comes into effect does nothing to help firms caught now with their contracts up for
"Some businesses are being forced into loss situations because of the crisis. One modest sized company we know of has
been told to pay $100,000 more. Larger companies face larger penalties. Damage is occurring to new investment projects.
"Government has a political issue of the first magnitude on its hands. Political action is called for. We support the
proposal for an urgent summit for the power industry and for a major power saving campaign.
"As there's no limit to how high wholesale electricity prices could go, it is quite possible New Zealand could suffer
the brown and blackouts that California experienced in the last northern winter, but in our case a national disaster