Electricity price rises: no independent analysis possible:
Press release by DEUN, 23 Aug 2013
Residential electricity prices rose again this year, by 3.4% in real terms, according to official statistics, now called
“Energy in NZ”, released yesterday by MBIE.
Molly Melhuish, convenor of DEUN, says, “Every time prices rise, DEUN goes to official sources to try to figure the
causes. This year, the statistics misses out one of the most important tables, which breaks down prices and consumption
of electricity into about 30 different sectors. It’s also missing the table of nominal electricity prices over many
years up through 2012.”
Without good statistics, informed independent commentary on reasons for price rises is not possible. Anyone can blog
about prices, any company can say whatever they like without fear of contradiction.
So Contact Energy tells us their revenues from the retail sector have increased – how can we say whether that’s
justified?
And Vector Networks blames the retail sector as a whole, in that most companies have not passed on the 9% reduction in
lines charges that resulted from Commerce Commission regulation. Where's the retail competition??
DEUN has repeatedly asked the Electricity Authority to monitor retail margins. Our concern is supported by Professor
Wolak’s graph, shown in a recent seminar in Wellington, which indicated that New Zealand’s wholesale market is
competitive, but the retail margin has increased rapidly.
DEUN will again meet the Authority next week, and will again insist that they conduct a full analysis on retail margins.
They have access to company data, which independent analysts cannot obtain.
Consumers will not sit back and accept “market watchers”, who “expect Contact to boost dividends even further next
year”, despite the “oversupplied power market”. We require a proper study of whether all or most retailers are boosting
profits and dividends by inflating retail prices so as to offset the effects of the electricity glut.
ENDS