Green Party accuses Government of being in a 'rush' to sell assets and says it has no 'moral mandate'; Business leaders want Labour-Green power plan pulled

Green Party accuses Government of being in a 'rush' to sell assets and says it has no 'moral mandate'; Business leaders want Labour-Green power plan pulled

The Green Party is accusing the Government of being in a "rush" to sell the three state power companies before the end of the year and says it has no "moral mandate" to do so.

Greens co-leader Metiria Turei said the Government plan was anti-democratic and  financially unsound.

"By desperately trying to sell all three companies in a single year, John Key will only depress the price the Crown gets for the sales. Treasury recommended that sales would only be viable if spread over three to five years to maximise revenue."

Turei said the Government's strategy would leave retail investors exposed when the mooted Labour/Greens plan for a single power buyer was implemented, reducing electricity prices.

Meanwhile, however, a group of business leaders has sent an open letter to Labour and the Greens urging them to withdraw their power policies because of the potential "chilling effect" on investment across the entire economy.

Turei said, however, that the Greens will "not be acquiescing to Business New Zealand’s demand that we withdraw this popular plan".

The partial sale (49%) of Mighty River Power is already well under way with the general offer to retail - or so-called mum and dad - investors set to close tomorrow. The price, expected to be within the indicative range of NZ$2.35-NZ$2.80 will be set following the institutional offer for professional investors next week.

Uncertainty about the possible implementation of the Labour/Greens plan has dented previously high expectations for the price.  Early market expectations were for the offer to possibly raise about NZ$1.9 billion.

However, this week betting patterns on the iPredict prediction website were suggesting a strong probability of a price between NZ$2.30 and NZ$2.50. As of today the site was listing the probability of the price being between NZ$2.35 and NZ$2.50 at about 81%.  If the price was NZ$2.50 this would raise just NZ$1.72 billion.

Turei referred to reported comments from Treasury today that it has approached financiers to make bids to act as joint lead managers for the sales of Meridian Energy and Genesis Energy.

"The timing of this strongly indicates that National intends to sell both of these companies, in addition to Mighty River Power, before the end of the year, she said.

“John Key needs to take a breath, have a cup of tea, and call a halt to the asset sales,” said Mrs Turei.

“The National Government has no moral mandate to push ahead with asset sales when there is a referendum on them looming. John Key clearly wants to get the asset sales wrapped up before the referendum and as far ahead of the election as possible. He’s putting his political interests ahead of democracy, good economic management, and his duty to potential investors.

"If he does insist on ignoring New Zealanders and pushing ahead with the sales, John Key certainly shouldn’t sell all the companies in one year."

Turei said Key needed to take time to properly inform Kiwis of the risks of investing in the electricity companies. The Government would have detailed information on the impact that the lower power prices delivered by the plan for a single power buyer would have on the companies’ values and other risks to the share price. They had a duty to disclose that information to potential

“John Key should call a halt to the asset sales until the referendum is held, listen to the results and, if he then insists on going ahead with sales, he needs to make sure Kiwis have all the information on risks that the government has,” Turei said.

However, business groups BusinessNZ, EMA, the Chambers of Commerce and others say in their open letter that the Labour/Greens policies would harm jobs, growth and investment, causing interest rates to rise, reducing KiwiSaver retirement savings and making people less well off.

BusinessNZ chief executive Phil O’Reilly says it is unusual for business to seek the withdrawal of party policies, but this particular policy if implemented would cause widespread damage.

“Subsidies and state control are not the right answers to the issue of electricity pricing. While sounding superficially attractive, such policies would in practice destroy investment and jobs.”

The signatories to the letter offer to work with the Labour and Green parties to help increase public understanding of the operation of the electricity market and in ensuring consumers have better choice as the electricity market becomes more competitive. “More price competition - rather than damaging price controls – is needed to drive down electricity prices,” O’Reilly said.

Turei said: “It is a shame that Business New Zealand and National want to protect the broken electricity market, which has led to massive power price rises. Families and businesses are welcoming our plan for change that will fix the broken system and replace it with a proven system that will deliver lower power bills.

"...The Greens make no apologies for wanting to get power prices down to a fair level. Business New Zealand and National seem to think that electricity companies' profits matter more than lower power bills for families and businesses."

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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You have to laugh. National are that worried that they get their 'indepent' business groups involved. The 3 mentioned are all basically the same anyway - chambers and ema are part of business nz. Not sure why it is released as 3 names.

You have to laugh.... at Ms Turei.... what does she want Kiwis to do with their discretionary savings ? Carry on investing in residential property ? Put it in the bank at 1or 2 % pay 1/3rd tax and get zero growth ?
This is a chance to get a stake in a good stable asset , with the government as the senior partner owning 51% .
Its a no-brainer
I am all in for this sale of SOE's

Why is the power company investment so different from the property investment? Power is a rentier forms of capitalism as much as property is. Both are essentially investments in rising commodity prices, which will harm the productive economy. 

BusinessNZ chief executive Phil O’Reilly says it is unusual for business to seek the withdrawal of party policies, but this particular policy if implemented would cause widespread damage.
“Subsidies and state control are not the right answers to the issue of electricity pricing. While sounding superficially attractive, such policies would in practice destroy investment and jobs.”
Certainly appears to be a contradiction to Fonterra's current position.
 Let's face it getting rid of inefficiencies, trimming the fat is part of encouraging private enterprise investment...and that means job losses whether initially or long term...The Banking Industry  post 2000 has demonstrated this model among others.  
 Of course there will always be the conflict of interest where bloated bureauracies grow jobs out of thin air  vs. well oiled Corporates maximising profits through efficiency before growth, but not necesssarily retaining the profits in the economy..
 But...and here is the butt...the impact of a rise in unemployment will be just as counter productive to an economy as regulatory intervention fears by potential investors.

BusinessNZ chief executive Phil O’Reilly says it is unusual for business to seek the withdrawal of party policies, but this particular policy if implemented would cause widespread damage.
The Green/Labour proposal is just that and will remain so until the electorate decides otherwise. What's all the fuss about an opposition party setting out it's mandate ahead of an imminent election.

The fuss StephenH is being generated by the Nat's election machine, the simple tactic is scaremongering about Pixie politics combining with Communist sympathisers to frighten off potential investors who may or may not choose to invest in such a well balanced economy.
 Now you'd have to laugh at Stephen Joyce's reference to commies, given we spend  an enormous amont of our time courting their favour, prancing through military salutes no less.
 Forgive me National but the PRC were still communists last time I looked.... or do you believe you've a hand in converting them to Free Market Democracy. 
How ironic would it be if we frightened off Chinese investment with leftist policy...? you'd think they'd appreciate the sentiment would'nt you

No, actually I think the fuss is National have no decent response to the opposition doing its job.
The repeated and widespread "commie" comments are enlightening, they are shallow and un-justified. I wonder really if it does National etc more damage than good, I certianly hope so.

You are both completely missing the point. The fuss is that "whats in it for me" voters will vote for this sham and return the NZ power industry to the dark ages in return for a possible power saving of 85 cents a day.

I guess you will vote accordingly.

Queensland Treasurer Tim Nicholls was rolled by his Liberal National Party colleagues when he pushed for a $10 billion power sale, despite warning the state government faced a credit downgrade unless it reduced its debt.
Even a last-minute plea to 74 LNP MPs by former federal treasurer Peter Costello to privatise assets to win back the AAA credit rating failed to convince the party room. MPs backed Premier Campbell Newman’s more cautious fiscal approach. During a tense meeting of MPs, Mr Nicholls pushed to sell Powerlink, the high-voltage electricity transmission network that is worth about $10 billion. He was defeated by 10 votes, according to government sources.

The LabGreen ticket still has to grasp the concept of willing buyer, willing seller.
And Interesting, innit, that the Co-Leader has the running this time.  Has the Norman bloke been stealing too much of the lime (sorry) light???
I have had my own application for a modest amount of MRP shares accepted.  I applied for three reasons:

  • a completely human if economically irrational desire to demonstrate fundamental opposition to their crazy notions of One Buyer to Rule 'em All
  • a suspicion that if that money was kept in the four-pillar bank's safe, it will be simply taxed-by-stealth away (in PP terms), whereas I can at least quantify MRP prices with a few mouse-clicks after it lists.
  • a desire to clip the ticket (divvy flow) on the 20% market share.  After all, an equivalent clipping goes currently (sorry) straight to Gumnut, who waste it on all manner of stuff I didn't vote for.  At least, in my grubby pocket, it will be 100% Wasted Controllably....

Is it a willing seller though? There is that much opposition to it and there has never been a referendum to say either way. The last election was not a 1 issue election, so National cannot argue they have a mandate as that would be rubbish and untrue.

National are however doing just that.  Crazy thing is, its such a minor thing in terms of $s, and its setting itself up to decide who wins the next election.

It's forced Labour into bed with the Greens.  Who, btw, seem to have shown Labour up in terms of polish and image.
Say that isn't an Gnat-Planned outcome, and I'll show you this neat harbour bridge I happen ter have for sale....

Don't be so sure, Waymad.
I was at a meeting last week, and a 'gathering' last night, and I'm amazed at the groundswell of folk who understand what's ahead. 30 people getting together impromptu'ly to discuss sharing knowledge, seeds, resources, land. Discussion ranged from the lead content of soil adjacent to old wooden houses, to rotation/compost/nutrient. They are quietly getting on with growing food, insulating, debt-reduction, resilience. There was no need to educate - a change from even a couple of years ago - and I wonder if the Green label is much of a bogey-man any more.
Seems to me the money-men are visibly out of moves, and looking a wee bit thin.
ps - the ocean has the problem Julian Simon failed to understand - dilution. It's my chosen playground, but the return in resource-recovery terms, vs energy expended to do so, is prohibitive. If a species is in trouble trying to base itself on esily-gotten, more compact, land-based resources, it is clutching at widely-spaced straws to suggest the sea will deliver.

How much for the Bridge...? can I fit a toll booth on it ..? is it a one laner with no bypass...?can I lease it to foreign interests provided they upgrade it to two lane, two booth...?
 replies to
Interested C/O OIO.

Labour Greens was or is very likely anyway.
I don't think National planned any of this at all and have come across as very small minded with their little insults in the press (commies, lefties, etc) rather than any meaningful discussion.
Whoever is currently planning their public releases and 'message' is not that smart.

Willing seller? I think the Green's are aware National is a very willing seller. What's the expression?... "Highly motivated vendor".
What the Green's seem to be pointing out from this is that National looks like it is going against Treasury advice on how to get the best profit from the sale. That makes National an extremely willing seller, just not one with a prudent interest in the asset value.

I mean really, does anyone take Ms Turei seriously when it comes to economic issues

Well, her partner is an Economics graduate, and I'll tell you he's pretty conventional about it.
He and I have had - it's ongoing - a robust debate as to whether growth economics can be had indefinitely on a finite planet. I sense that she may believe that child poverty can be addressed, which at this stage of the game can't happen. Note the European jobless numbers, as a portent of what is coming.
By way of comparison, our current Finance Minister recently (t'was a clip on RNZ News) suggested the Govt goal was 'sustainable economic growth' - now who can take someone spouting drivel like that, seriously?
And when Joyce equated (correctly, if you ignore the lowering global lid ant it's fiscal ramifications) offshore oil/gas with wealth, Parker failed to mention energy, just said 'mining'. That's an ex energy minister, so help us, now finance spokesman.
Compared to them, she's not too bad.

Thank God the Greens dont run NZ , and heaven help us if the ever do

Could it be that much worse with the Greens. I am done Boatman. I think Fukushima did it for me. As each day passes the world ending experiment with nuclear goes on. So long as the banksters and capitalist crazees are in charge, hope for my grandchildren goes out the window. What do you hear about the abomination that is Fuku. Zip eh. Its too big and ugly to discuss with the masses. So they pretend its over. These sods that are supposed to be looking after us have put us on the slow burn to hell. So I go green from now on. No apologies.

Boatman - please explain? - the Greens exert significant influence in the German economy and no one there is looking to heaven for economic advantage.

This would be the 'Germany' that gets 24.9% of electricity generation from lignite, and a further 18 and change percent from hard coal.
'Green Germany' - just another fracking oxymoron...

My impression is that people cite the use of lignite in Germany as some kind of criticism of the German Greens, but all it suggests to me is that they pragmatically gradually worked with what was there. Electricity production from renewables has gone from about 6% in 2000 to about 20% without crashing the economy in the period, so they seem to have gradually moved in the direction of renewables.
Now, I get that you don't like the Greens, but could you explain what point the criticism was supposed to be making? That in government they make moderate, practical change in the direction of sustainablibility?

Germany also has a large solar feedin. They also are going to shutdown their bwrs same sort as japan has I think....
So really there are limits to waht you can do and still keep the lights on.

About 35 years ago the Western world, in its wisdom, started to bullschit everyone into believing they needed a super fund. From that day forth billions of dollars have poured into the  investment market.

Similarly, over the same period, the distribution of wealth has changed, such that now the top ten percent own much more of the worlds wealth. This wealth is also being pumped into the investment world.

Thirdly, we now have trillions of QE money finding its way into the investment world.

So, over the past thirty odd years there has been phenomenal growth in investment dollars. Has there been a corresponding increase in investment products?

It has been known for some time that there was going to be big demand for investment products and a solution had to be found. Simple, sell state assets. So the West has been flat out selling assets to keep up with this demand. The problem is we need phenomenal growth in investment products to keep up with the supply of investment dollars.

That is why we have to sell our Power Companies. That is why we have to get rid of all the small hospital caterers and have a multinational take over. That is why Councils had to get rid of their garbage collectors and give the job to a multinational and on and on and on. Not just in New Zealand but world wide. Ultimately we will have to sell schools, hospitals, roads, everything. When we have nothing left what then?
If we don't sell all our assets what are the Fund managers going to do with all that Super money? and what about the poor 1%, where are they going to stash all their money?

I read recently, in, that a group of researchers had gathered a phenomenal amount of historical data. They have created a computer program that looks at this historical data and then tries to predict the future. If their prediction is correct, then in 2020 there will be massive world wide social unrest. That sounds about right to me.

2020?! I think it has already begun..with growing unemployment plus increased austerity in the EU this is just the beginning. Europe will probably self-combust... the thought of Italy, Greece, Spain, France etc with growing youth unemployment something has to give... desperate times leads to desperate measures.. who knows, maybe our own ignorance of not investing in our nations youth will come back to bite us squarely on the proverbial.
History does have a tendency to repeat itself.

To Phil Reilly at Business NZ.  Phil - I am in business and you don't represent me.  I think the imposition of a real market in Electricity would be of great advantage to business and the economy in general.
And don't pull out the cheap shot of "State control'.  That's not what this is about.   Actually what we have now is the imposition of monopolistic practice in the electrical supply with the connivance of Government.
Business should be advocating that to end.

By Jingo's KH....well said..! good for you....

Ive been talking to many farmers who are/were National party supporters some even told me they would rather vote green than National. 
National are on a hiding to nothing if they keep on doing. I thought some back benchers might have had the balls to step out, but nothing,yet.

Yip me too. National are out, Green in. I also know some staunch Nats who are thinking quite differently now. Not sure on the exact  catalyst, but MRP sale is mighty unpopular. If the business boffins would only realise that electricity costs are frightening and the population is going to look to anyone who gives them hope of better pricing.
As for MRP float, I have backed off, my investment dollars are heading to solar panels, and a new wetback. Wind is also going to be in the mix. The MRP dam is only 20 k away.Yet I pay ridiculous power bills. So stuff them. I am planning on going it alone.

Most of the farmers I talked to were upset at the line caharges. They have one or two pump sheds a woolshed, impliment shed, workshop etc. Some told me they are paying over 12k a year when they only use the woolshed one week ayear and the lights in the impliment shed once or twice a week.
 Lots of angry people, National is way out of line on this.
 look at the poor Aussies

Yes I have the same problem Aj, my lines charges are simply amazing... well thats a nice way to put it. We have the water, we have the rain, we have the dams, we have the generators, all paid for many years ago, we now have more geothermal coming on stream. I want to know where the money is going. Where my money is going. It is bloody criminal.
Now onto your link. Looks sad

can be fixed by centralizing metering point to one set of read meters and then only pay 1 line charge.simple stuff usually

Kool. Explain how. They are a km apart.

I tried that but it was not as simple as it sounds.

you will have to contact your local supplier.the neighbour has 1 woolshed ,3 houses,2 workshops all on 1 read meter and probably 1 to 1.5km spread.
may cost a bit to set up but will pay for itself in the long run

Good thinking Belle. Power to the people. You can march in the streets, you can protest, you can abuse you local member. You can waste your time. Or you can go it alone and get the leeches out of your back pocket. In 10 years time when power is $0.70 cents per kw/h you will look back with satisfaction at a decision well made. If enough of the hoi poloi did the same the game would change.

If you go to solar Belle make sure your solar panels are bird damage proof, if you have a lot of bird life.  We had a place with solar hot water already installed and it had a plastic like cover on the panel.  The birds wrecked it not long after we moved in, so we replaced it.  Then the pipe on the roof blew in a frost (a problem we had had with an existing solar installation on the farm, which we eventually disconnected), the birds wrecked the plastic again so we disconnected it.
It sounds exciting times ahead - look forward to hearing how it all goes. Since moving to the South Island (and not far from several dams), I got quite a surprise at how much dearer the power is here compared to the North Island.

Interesting comment Andrew - I visit farms regulalry and I haven't meet one yet who thinks that, in fact quite the opposite - the two I saw today were typical, vermanently opposed to anything that looks like a Labour/Green Govt. Of course there will be a multitude of "farmers" on here who will disagree with that,  but my experience across hundreds (who increasing steer the subject to politics lately unfortuantely) suggests otherwise

I live in california and only talk to farmers in the Ruataniwha Dam, irrigation scheme. Most of these are horrified that they could be forced from being, low risk, farmers with low debt, to being highly indebted, high risk farmers, paying for water every year, dry or not, at 10x the water price of Australian farmers.
  They may be biased. Although I do have a couple of friends in National still, they are not happy at the moment, either way its AKL that decides the next Government, you can tell by where the money is being spent.
Im horrified at the damage the drought has done in my area 
 The drought is still severe in Hawkes bay and Taihape, whats it like over the rest of the country? Im trying to keep with up whats happening but only getting home every six months and can see myself spending more time in Europe than in NZ. (my wifes home)
 I think  NZ is in for a depression and its going to be good one, but Ive been wrong before, I thought house prices would fall significantly in NZ, instead they went the other way. 
 I think we need to look after exporters better. I think dairy has had its boom and will be a struggle for the next decade at least, sheep farming is in crisis, beef will take the place of sheep.
  Somehow the debt will have to be reduced or we become servants of the banks, maybe that will be the outcome.
 i always noticed that I did better farming under labour but kept voting National, if Labour Greens get into power then id expect farming to do better. Politicians always try to buy votes and National already have farmers in the back pocket, labour/greens would like to.
 I talked to David Cunliffe last time I was in NZ, I found him much more open to change and aware of the problems than our local Nat MP, who walks around kissing the leaders butt.
  I say good luck to Cunliffe, this from someone involved with National for over 20 years. We need change and I see Key as a disaster, for what he didn't do.

Aj/Grant - interesting to read your differing experiences, but perhaps Grant you move more in dairy circles? 
Living now in a non-dairy area I am hearing comments similar to what Andrew has written. I recently attended an irrigation company meeting and a few of the shareholders were commenting on how they wouldn't be financially viable if they had to pay the fees the proposed Tarras Irrigation scheme were going to charge.  They were more than happy to approve a slight increase in the modest fees charged by their company. I picked up from the meeting that maintenance on these schemes can be very costly, especially if you have to pay for replacement pumps/pipes etc.
On the other side - dairy - my contacts there do not want to see a Labour/greens govt.  Environmental costs and bureacracy are very significant for dairy farmers. Irrigation is not even on the horizon for most dairy farmers.
Aj, Central Plateau looked just as bad as Taihape when we drove through it last month.
I note Aj that when you talk of living in various places (California, UK) there is always a strong family tie/bond.  That makes it quite different to some one who up sticks to move away purely for political/financial reasons. ;-)

C/O, yes im just following my family and we expect two children to be living in the UK next year, with two at Uni in NZ and one at school in California. The schools here appear to be very good, much better than we thought. My English friends tell me my children are getting as good an education as they get for their 28K and thats Uk pounds. It almost pays us to stay here. One good point about living here is that I can zip down to San Fran, Nappa etc, or head north to the mountains lakes etc very quickly. (not that unlike Waipukurau) Also i like the cheap flights, well I think they are cheap $900us to the UK or Paris rtn. I trying to do more volunteer work over here but sometimes its a bit scary, with all the drugs and homeless.
 The problem is I only have girls and they are social, I like dogs, stock, dust, woolsheds and cattle yards. though my back struggles with day to day farm work.
 So Im cashed up and looking around as I have been, for far to long, if returns improve I will be back farming again, or expand my vineyard, which I should do anyway I just find the work boring without Mexicans.
 So family and close friends in, England,Scotland,France, NZ, Chile, Australia,Canada.
 I think we should settle in the South Island, wife disagrees.  Thinking of how best to help my children get on in the world. In the UK its who you know, as Im a bit of a shit, that could be a bit hard. So they may need some capital.

A vineyard Aj, we too now have a vineyard albeit rather small.  In fact nuisance small - to small to be a money maker (if there is such a thing with a vineyard), too big to be a hobby.  They are incredibly time consuming things - much more fun ways to spend our time.  Not a lot of pinot so we harvested that - the only wine I really drink, and gave the pinot gris to some lovely comedians who had lost their crop to frost.  Think we might pull the gris out and build a real man cave for the MOTH. ;-) Bought the place for it's location, not for what was planted  here.
We'd been thinking about moving south for about 6 years, then one day just made the decision - don't regret it at all. Got a family connection here now which made the decision rather easy in the end.  Enjoy your travels. Stay well.

CO, I would give the vineyard a miss, like I say not enough Mexicans and the ones we do have are expensive.  I have a great site and I think if I ever sell it it would go to a big winery. I need to double the size but Im in one of the new irrigation dam schemes, which means I may have to pay a small fortune for water, which at the moment I get for the cost of running the pump.
 So i dont want to get any bigger unless I know the water in secure. I only use it mostly in spring for frosts, and at that time no one else is irrigating. The rest of the year it uses minimal water, although I had to spend 2.5k this year on tele-metering for the Reg council.
 Vineyards are run for a loss it appears most of the time, people do it for other reasons. Personally I dont get it, just a lot of repetitive work and risk.

Any chance of letting us know the irrigation charges for either/both Tarras/their company?

Phil how many of your members are pleased their electricity costs and tariffs include paying for the generators over charging by $10 to $20 per Mwh of electricity during peak power periods of the day.
When change to market trading rules and fair trading rules would make the issue go away.
Phil the way we see it, is its like going to Avondale to punt on the day the race stewards were away...

Here we go again
As always, there are missing pieces to this custard puzzle. DATA. INFORMATION. SUNLIGHT
There are differences between the prices charged to different customers
You just dont know the extent of those price differentials

  • Industrial
  • Commercial
  • Retail
  • Residential

The private residential customer is the captive one who is a price taker
The business customers are on a somewhat different tariff
Why do you think that is?
Who do you think the disadvantaged ones will be in the event of the proposed policy?
A rethink or tightening of the differentials?
Why do you think they're wheeling out the business-big-guns now?

We see what you say, We have been just thinking wholesale, but your point is whats the price once everything has been thru the retailer pricing matrix.. (for that is what it is)..
Remember what the Australians found, all these "sales" people now employed to sell what is something everyone (almost) must have.. (essential service) - don't needem...
Then look at it in three buckets
network - there is a fight on now over network low voltage and transmission high voltage regulated price paths/investment needs etc...
retail (across residential/C&I/SME)
Usually the retail power companies use a reference rate (or as in OZ - NSW&QLD a regulated tariff), and mark their plans as discounts from that reference rate.
In VIC with no regulated tariffs, they use their own reference rates (which are way high) then, some claim eg 20% less than market indicator (but as you see is a trick,each has their own market indicator - lol) - Ask why Infratil had to change trading names from VIC Elec to Lumo, another story.
In QLD retailers are not happy, as the regulated tariff is too low, so they don't have any margin to offer up as saving v regulated tariff (therefore mo money to spend on door knockers...
When retailers say market competition, they mean, enough headroom (between actual costs and regulated tariff, so that they can employ door knockers and have people switching accounts once being told of % savings versus regulated tariff) To them competition is switching (not lower $ costs). Look at switching/moving sites here, in OZ and in the UK, some have made heaps.... (they usually have house power companies they just pass ppl thru to)..
And retailer actual costs are 1. power generation, (physical and contract/hedge +gtee) 2. network charge + gtee, 3. meter costs (here retailers own the meter, in OZ the network company does), 4 billing softare, 5 marketing costs 6. switch site fees and profit.... Its scale, its billing production, its bad debt mgt...

Henry: I was getting there. In other words the generators and the distributors hide unseen behind the retailers. The action is all froth and bubble on top and nothing underneath. Or as my old man would have called it - a mudguard - shiny on top - dirt underneath.

Yes, the generators and network types only just acknowledge the retailers, as it is the retailers invoice that collects from the punter and otherwise deals with the great unwashed - resi, sme and C&I. and starts the stream, no wave/sea of cash that flows over these sets of assets/supply chain .....

Can somebody put up the default provider prices for residential power in

  • Whangarei
  • Auckland
  • Wellington
  • Christchurch
  • Dunedin
  • Invercargill

Lets see how competitive it is

crikey - not even one taker - they all go quiet - must be secret womens business

Start here for a look thru how the network companies think.
You need go to each one to get their tariffs for retailers

Here is the high voltage network, the ones earlier are low voltage

retailers: list
Find out more about New Zealand's energy providers. There are 18 retailers in New Zealand but many only operate in certain regions. Depending on where you live, you should have a choice of between 4 and 9 retailers.
work areas by area and account for multipla tariff/plan types, volume/season etc, etc...
The rest is a job for excel. bon chance...

Oh dear .. for crying out loud .. I can't believe some of this stuff .. I'll think about it overnight

DC's table is good. with numbers weigethed to summary.
We think you are trying for a cost stacker per location.
Generations block Costs+ profit
Transmission block Costs plus margin. We need to check if the network company tariff and daily/line charge for end user includes a margin for the retailer?
Retailer block Costs (their own and Gen and Trans from above) plus margin = consumers cost.
Volume is important, as elctricity is lost thru transport, so price are to the customer are grossed up to account for fact that customer meter only sees say 92% of electricity generated. Street lighting is usually smeared across all.
Where people don't have a smart meter, but the old clock dial ones, (point to point/accumulation) their daily profile is deemed from a set of monitorinbg metres in the general area. Hence with an old metre, you can be home for 1 week, away for three, but your charges are based on that volume over all 4 weeks.
So turning off when price high, means nothing, as it just trims the volume for the month/quarter..
Gets you thinking about payments flow..

Blessed are the door knockers..
The activities of large energy suppliers were under the spotlight again on Friday when Ofgem, the industry regulator, confirmed that it would levy a £10.5m fine on SSE for mis-selling.
The penalty, the largest the watchdog has imposed, was levied for numerous breaches of SSE's obligations relating to telephone, in-store and doorstep sales activities.
It is the second time in less than two years that the utility has been found guilty of misleading customers on the doorstep and comes just 48 hours after Ofgem announced it was investigating SSE and five other suppliers about their failure to meet energy efficiency targets.
In the latest mis-selling case the contraventions involved "the use of misleading scripts" by both telesales agents, while also failing to give "accurate estimates and comparisons to customers".

A door-to-door salesman spruiking AGL's electricity and gas services in the Melbourne suburb of Coburg in late 2011 has cost the energy giant nearly $1.5 million in penalties for lying to consumers.

Read more:



AGL's general manager of retail energy, Stephen Mikkelsen, expressed regret the breach had occurred and called on the rest of the energy industry to stop door knocking.
“This case demonstrates how difficult it is to control what salespeople do when they are at people’s premises.  Even if a company puts significant training and compliance mechanisms in place, doorknocking remains a risky sales technique,'' he said.
"Doorknocking also preys on susceptible segments of the community, such as the elderly and migrants. Those companies still undertaking the practise are doing harm to the energy sector’s reputation."
Meanwhile, the ACCC pointed out Neighbourhood Energy and Australian Green Credits were last year also fined significant sums for door-to-door sales tactics.
"These significant penalties send a clear message to businesses that do not adhere to their obligations under the Australian Consumer Law. The ACCC will not hesitate to take action to protect consumer in their homes from unscrupulous sales tactics and enforce compliance with the laws," the ACCC chairman Rod Sims said in a statement.

Electricity and gas are essential services, we thought...

Of course the business round table etc are of no use to you or there for you. They are there to push a political agenda and support the large corporates who see you and I as a feeding ground to gorge on freely.
I keep hearing that small businesses are the backbone, and provide much wealth and employment, yet really they are prayed on with connivance from Govn.  I mean where does much of the political funding come from? who in turn are the ppl who are taken for granted? Where do ex-pollies go when they leave Govn service?
and we as voters put up with it....not that there is anyone else to vote for.

The petition to stop the sales was over 300000 signatures and Key trunpetted that they had 400000+ initial interest in applying for MRP.
If it is anything to go by not one of our immediate family who signified interest has actually applied for a single share. That is eight non-applicants and I do wonder whether Key will be so cocky when the actual numbers are published.
Bomm, Boom.Basel

I think Key may have been including fund management spreads in those figures BaselB3, technically including portfolio holders as pro asset sales instead of detached savers allowing participation through their spread....
 yup I have similar figures to quote....but hey , I got till tomorrow 4.45 to decide if I want to bet against can bet he see's a midday rush tomorrow laying off bets.

What will it prove Basel if that happens to be the case ?

Remember the fact is the Government IS NOT SELLING THE ASSETS just a MINORITY SHARE  ... thats all .
The NZX and our Capital Markets generally will be better off for it.

Am not sure the vast majority of New Zealand citizens, who now collectively own 100% of the power companies, will be all that impressed in November next year with the idea that a few punters have perhaps made some money at their expense; compared to a proposition then that will be offering them considerable savings on their outrageously high electricity bills.
By the by, the suggestion that the NZX or NZ's savings history or habits needs these sales is a tragic copout. NZ owns 100% of them now. Even the Nats admit that NZ will own 85-90% of MRP immediately after the sale, and that percentage will perpetually decline. That is dissaving in any book.
There are plenty of options on the NZX, or the very easy to invest in ASX, for any investors to consider. The NZX is a relatively efficient IPO establishment by exchange standards, for those companies looking to go public. None of it needs these sales to go ahead; although the Nats' mates would of course like them to.

Stephen L - "Am not sure the vast majority of New Zealand citizens, who now collectively own 100% of the power companies, will be all that impressed in November next year"
NZers are already reacting to the Labour/Greens policy, see todays article -
"National jumps in poll"...  "Roy Morgan poll shows support for National rises 6% and Labour and the Greens both fall after the release of their power policy"
It appears that Labours shift to the ultra far left has not been welcomed.  Most voters are old enough or educated enough to remember communism and the utter failure that it was.  I think that combined with the dirty politics and sabotaging of an important event for NZ (for Labours attempted political gain) has not gone down well. 

I guess you suggest we close trading relationships with the PRC, now our biggest trading partner ahead of Australia.

Assuming this poll is not a blip, then it would seem you are right. John Key can do no wrong, and New Zealanders are happy with a power market that has increased real prices by over 70% since it came in; and even though the structure of the market would be seen as flawed and anti consumer by a half intelligent 10 year old if they had it explained to them. 
What can I say.
Sell off everything; leave the markets to favour his mates at the top end of town, and win next year in a canter. you even read what you have written.??
Dont let facts get in the way of a good rant will you?
Power prices have gone up 70% since 2000(Aunty Helen started the rot)National have  actually reduced the rate if increase.
If the Lab/Green mob get in the power prices may drop but tax will rise
The ONLY reason we are discussing this is that the Greens want to derail the PARTIAL asset sell off .They dont care about your power price(in fact they really want you to pay more..why else have an ETS..??) rememder the ETS?
Labour are no better .one minute we shouldnt sell cos we will loose some of the dividend stream........................NEK minute they are happy to loose the whole dividend stream..go figure.
I read somewherethat 270000 people have actually forked out $$$ to buy shares..probably more reliable than the rent a mob petition that went around for nearly a year

I read somewherethat 270000 people have actually forked out $$$ to buy shares..probably more reliable than the rent a mob petition that went around for nearly a year
A veteran investment banker is confident more than 100,000 investors will have lined up to buy shares in Mighty River Power, saying the process was not unusual for a major float apart from the political profile.
The first of a series of planned partial-sales of state-owned enterprises, the offer period for Mighty River Power closes at 5pm today Read article

Don m,
National have reduced the rate of increase; and you are happy with that? So the price had gone up 70% before the Nats got in; and then another 20% is good?
The attachment you have linked to is so poor it is sad. It tries to defend the current auction system; but that has been debunked by a study done strangely by an Italian University- and linked to recently by Henry Tull. The power companies have been proven to be gaming the system to maximise their profits using monopoly like pricing power.
Separately your article has the following:
Some 78 per cent of electricity generated by hydro and geothermal plant is owned by the Crown. Adjusting this figure for taxation on private sector activity, a one dollar electricity discount to a household reduces government income by at least 85 cents.
For each household's power bill reduced by $330 government revenue will fall by at least $280. Either household taxes need to rise by $280 or government expenditure be curtailed. Across all households this has substantial implications for taxation and government funded programmes.
Am not sure if you have been paying attention; but this is exactly the point.
The Nats are selling it off.
So the 78% owned by the Crown will drop to 39%. 49% of the super prices and profits for hydro in particular will now be going somewhere other than the Crown. So overcharging now matters a lot more.

Its not "ultra far left", its simply to the left of the right of centre on this issue.  It isnt communism either...if you want to go off the edge, well it seems you are in good company.  "not gone down well" sure in the minds of the it seems far right wing, but then that wont have cost Labour a single vote from that constituancy anyway.  National has a slim if not already gone majority. I cant see this dogma and rhetoric doing them any good and actually lot of bad, shows their true colours in a bad light IMHO.
Meanwhile I think there are 300,000 voters who clearly dont want their assets sold from under them and an unknown number (but which seems significant) sick of being gouged by a monopoly driven by the present govn to give out un-realistic yields to meet a political agenda and not good economics.
The more I see comments like this from the right the more I am convinced its the right course.

 Happy 123's Roy Morgan poll shows  Nat's rise 6%.....timing , timing, timing....bollocks and timing.
 Do ya get what Stephen H is saying to you at all...? We now rely on Communists or can't you see that through the blinkered blue.....
 I 'd give my eye teeth to see Joyce repeat what he said in front of a Chinese delegation.....
They are Communists genius...! lefties...reds....pinko' get any of that yet...?
 Or do you think Key's in control of the balance of favour....smarten up rocket boy..!
I have barely if ever stooped to calling someone an idiot....don't tempt me any further.

Whoa!  You ultra far left radicals certainly get wound up easy! 
So the poll is rigged?  Will the same poll be rigged next month if it shows Labour/Greens gaining?
Nationalizing major industries is a communist policy, that is a fact.  If you and the other paid Greens supporters that choke up these threads don't like that fact you should take it up with Norman. 
"Nat's rise 6%" - the people have spoken. 

ultra far left radicals...? Happy123, you wouldn't know a Commie if he came up an bit you in the'd prolly think he was a freindly foreigner in the process of a trade deal with you.
As yet you have failed to respond to  a reasoned statement. ...economic ...well...being...under...a ...National...administration....?
I do hope I spoke slowly enough for you to comprehend the question.
As to was the poll rigged....I can sample three polls from different sources on the same day and get a different result on all calm down the cheerboy...don't forget Romney had legs on's a funny ol road to prosperity sometimes.
BTW your not Aaron Gilmore by any chance...? He's just won Dick of the Year far

Haha, too easy.  You know there's no point in continuing a debate when someone is so thin on ideas they resort to personal criticism of someone they've never met. 
You've been owned, have a nice weekend. 

You know there's no point in continuing a debate when someone is so thin on ideas
At least that part we can agree on.

Sorry Happy, did you mean Aaron  or in not having met..?
if you genuinely wanted debate you could have at least attempted to answer the question.
 Yes or No will do.
 If not, I agree to call it a day......debate wise, 

The power industry is nationalised now; albeit with a pretend market structure. The National government is selling it off without fixing the structure. The Labour Greens proposal is not to nationalise the market again, it is to fix the market. 
However as you say, if New Zealanders really are as happy with it all as you are, as this poll suggests, then so be it. Does seem surprising that the majority of New Zealanders would prefer to pay way over the odds for electricity; so that corporates and their onshore and offshore managers and shareholders can reap the benefits, (as opposed to the state) but am democratic enough to respect if that is what they want, then they can have it.
The next polls will be interesting. to see if they confirm this view, or whether perhaps as the debate matured, whether more people realised that the current process is flawed.
Time will tell.

I agree that we pay too much for electricity and there needs to be reforms by way of light touch regulation in the form of a price ceiling. 
I just don't think NZ Power is the way to go for the reasons mentioned before. 

A price ceiling would probably be better than now, although in my view less market oriented than now, (or than the Labour Greens proposal) and open to more politicising than what I understand the Labour Greens proposal is.
What the Labour Greens proposal would encourage in my view is potentially separate generators and or separate retailers. Currently the gentailers can game both ends of the price, making it impossible for a new entrant in either end to enter with any scale at all. 
The bureaucracy required for an intermediary powerco should be very small indeed; and probably little more than admisnistering a price ceiling.

Can someone explain...  The Greens/Labour want lower electricity prices which, as a consumer of electricity, sounds nice.  So why not propose a bill that simply puts a price ceiling on electricity prices in NZ?  Why do we need a whole new govn dept full of bureaucrats that I have to pay for?  A bit of light touch regulation which costs the tax payer next to nothing will achieve the same thing. 

We have a light touch now which clearly has not worked, its been freebee pillage time. 
You cant put a price ceiling, a hard ceiling at least. It would be insane IMHO to expect any company to supply a good at a loss and Ive not seen anyone suggest this is a goer. 
The best you can do is make the market as competitive as possible. One way is making a single large buyer who then has the clout of a large buyer it potentially makes sense.  The other way and a way that works is to do something like the UK does where there is a price setter.  I agree that there will be an overhead and it might be bigger this way but Ive seen no cost comparison on possible methods so its pure specualtion on your part.
The thing with NZ is the owner was also the dividend receipiant who then also of course had a stake in prices being as high as possible and the monopoly power to ensure that. 

We don't have a price ceiling currently so can't see how you declare it a fail.  If 'NZ Power' declares the price at, say, $1/kw then the price is $1.  If the govn legislates a price ceiling of $1/kw then the price is $1/kw.  Same difference minus the insane overheads that come with a new bureaucracy. 
It simply doesn't make sense for you to say "...expect any company to supply a good at a loss..."  when both options allow the govn to dictate price.  The govn simply dictates a price that's reasonable. 
Kiwis will still earn dividends on power companies, either through their own direct ownership or the govn 51%.  The partial sales just means we can pay down some of the massive debt that Labour accumulated in the naughties. 
"The best you can do is make the market as competitive as possible" I've never known a industry to become more competitive from being nationalised.
Cost comparison...  How much does a bill through parliament cost?  The politicians who will spend time on it are already on the pay role and one of the existing bureaucracies can monitor prices. 
As Labour/Greens are losing ground in the polls on their existing plans I'll bet they back off a little to just this sort of stance. 

A poignant response there Sore-Loser, but then you are always at the sharp end. I do hope you keep entertaining us, even if we have to suffer being shouted at from time to time. We actually do have the choice not to read if it really annoys us.

I usually skip your posts because they're a little lengthy and repetitive, try mixing it up a bit. 
There's no place for CAPS or bold text, your arguement either carries weight or it doesn't. 

He might be a little high end reading for you either get it or you dont...!
 Give my regards to Dopey and the boys.

In my opinion, there is a place for CAPs. There is a case for bold text.
Would you suggest we all talk like Eliot Goblet? That is, zero emPHAsis on DIFerENT sylAbles?
(I say POtato you say poTAYto)
similarly, SORE-Loser is DIFFERENT to the main-stream poster. He is ORIGINAL.  And yet... would chase his point of difference away.
There are many right wing zealots on this site. But there is only one Sore-Loser.  I would prefer to skip the right wing zealots posts, particularly those who are stuck in the mind-set and language of the 1970's cold war era,  and read some of Sore-Losers posts. He has an ability to craft the language he uses in his posts to get his message across in an original way without having to drag out cliches.

Sore-loser would be happy, debate has been stoked. 
"right wing zealots" I take it your referring to me...  My earlier posts suggested light touch regulation and a price ceiling; that's "right wing zealot" in your book?

anyone who uses the defunct "ultra-left" epithet from the 1970's  comes across to me as a right wing zealot

Your quite correct, the last time we had to endure ultra-left politics was in the 1970s.  I'm not sure why it's reared it's ugly head again as we all know the utter failure that it was.

 Happy 123 We are not only enduring ultra left Politics we are licking their proverbials....they are our biggest trading partner...! Mor  on that later

well said

Well said Gibber, I second the right wing nutter's comment being barred, as opposed to original and witty comments that might upset the status quo...

I for one would be disappointed if you could no longer provide the flavour you do to this site.
I have been impressed with your word-smithing abilities and you ability to catch the eye. An ability that few on this site share.
I have tried to work out what to say about the editorial policy that has led to this post. The best that I can come up with is that driving away an interesting poster like  yourself seems akin to taking a loaded shotgun and firing it at your server.

Nice analogy Gibber...certainly what I was alluding to with David about balancing it out.

Sore-loser, although I tend to skip your posts it is a little harsh for to delete them.  Whether I agree, disagree, read or don't read, your welcome to your opinion. 
Enjoy your trip. 

David C maybe you should step back and try to understand just how insightful and interesting sore loser can be. His way with words is different but entertaining. (may not be the right word but I enjoy reading his posts)
Further maybe as I suspect you dont get the internet.  Using CAPS copiously would be more flaming someone directly rather than a form of limited expression / word art used here.
Maybe financial ppl are very dry in their outlook, I guess beauty is in the eye of the beholder.
NB With great power comes the responsibility to use is wisely.

Worry not Sore-Loser, Mumbles was simply having a bad day, and he has absolutelly no sense of humour! I got exactly the same BS over a comment on Handover Finance... He said I was smearing MRP... I think the smear is on his nose, and it's brown!
I certainly enjoy your witty comments and diatribe. Keep it coming! Actually, I read the comments before I read the article, I start at the bottom of the page and read it up from there. Hardly ever do I get to the reporters text. Specially mumbles! He's as dry as week old bread! And his reports in the morning presentations are imposible to understand. I gave up on it way back, but I miss it. I enjoyed it for years whilst BH was running it... Even with all the gloom and doom...

Everybody take a breath....can't really see where SoreL caused offence David, is it shouting in that not a reasonable symptom of frustration...?
There is a world of difference between shouting at an individual in rage or spite .. compared to forced focus of a point of view to the collective.
 If you are recieving report comment transmissions on his Capitals you shoud aprise him of that.  We bloggers are reasonabley self regulating and comply to reasoned requests.
 It is however your site to Govern as you see fit, and your tolerance is appreciated as occassions have arisen.....uh, there's always a but there, isn't there David, I think your smart enough to balance it out.

And me another.

get back on the "horse" sorrel sorel
I’ve been through the desert on a horse with no name
It felt good to be out of the rain
In the desert you can remember your name
’Cause there ain’t no one for to give you no pain

After two days in the desert sun
My skin began to turn red
After three days in the desert fun
I was looking at a river bed
And the story it told of a river that flowed
Made me sad to think it was dead

The ocean is a desert, with it's life underground, 
And a perfect disguise above. 
Under the cities lies, a heart made of ground, 
But the humans will give no love. 
la la la la.

I went to the dessert on a horse with no name,
it felt good to be out of the rain,
in the dessert you can't remember your name,
'cause there ain't no one to give no pain!
la la la... la... lalala, la la la... la la
Beautiful! Brilliant memories!! Thanks...

Why not move to a real market, 1 miilion smart meters trading electricity in real time, Now that would be a market. algorithmic trading no need to do it yourself. Trades would happen in fractions of seconds. It is done now with shares- it could be done with electricity as we actually consume- or not. Would be wild.
trouble is untill we get more than 5 or so suppliers they control the market because you cannot really buy and hold, only consume so real markets are a tough one for electricity. It is the nature of the beast.

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