2 April 2013
Contact confirms asset sales mean higher power prices
Contact Energy’s call for higher power prices to satisfy the profit demands of private investors is confirmation that
asset sales would mean Kiwi households would pay more for electricity, Green Party Co-leader Dr Russel Norman said
today.
Contact Energy CEO Dennis Barnes has today called for higher power prices to generate higher returns for private
investors. Contact’s ‘competitors’ conspicuously failed to disagree with Contact’s push for higher electricity prices.
“If National sells our electricity assets, it will mean higher power prices for Kiwi families and businesses,” said Dr
Norman.
“It is no surprise that Contact is using the asset sales to push for another power price increase.
“Mr Barnes is right; private investors need larger profits than the government to make a return on investment because
their cost of capital is higher. And higher profits means higher power prices.
“The excuse that capital is needed to fund new power stations doesn’t stack up. A raft of new generation projects have
been cancelled or suspended in the last few years due to static demand. The risk that Tiwai Point will close means more
likelihood of a surplus of generation capacity than a shortage.
“New Zealanders don’t want our assets sold. We don’t want to pay more for our electricity so that foreign investors can
make fat profits at our expense.
“National should put the asset sales programme on hold until the referendum is held, and it should listen to the voice
of New Zealand when the public votes ‘no’ to asset sales,” said Dr Norman.
ends