The electricity market is not working with price rises going unchecked by competitive pressures, the Employers & Manufacturers Association (Northern) says.
"Not satisfied with their boost to tax paid profit of $49.9 million for 2001, up 26 per cent to reach $244.1 million,
the Government's three power companies are putting the price of power up another 50 per cent this year," said Bruce
Goldsworthy, EMA's Manager of Manufacturing Services.
"We are getting a flood of businesses advising us their power prices are going up by around this figure. Increases of
this magnitude are unacceptable.
"Government's three major power companies - Meridian, Mighty River and Genesis - averaged a return on equity 46 per cent
greater than they budgeted last year. Contact is coat tailing on their market price rises.
"Their increasing returns represent an unscrupulous, short term and unsustainable tax grab by Government.
"They are also unsustainable because the businesses affected will cut power use by limiting production and jobs, or
worse, move production offshore.
"Government is expecting New Zealand businesses to start observing environmental and socially sustainable criteria but
its own SOE businesses are plainly the worst offenders as their actions are both unsustainable to themselves as well as
threatening to others.
"Government must address the situation urgently, to ensure security of supply is maintained this winter at prices that
permit our industries to remain competitive."
Ends