Turns out we never needed NZ Power: power prices drop

At the last election Labour and the Greens proposed nationalising our power markets.

Their plan was utterly crazy and based on lies and false promises. Fortunately it isn’t really needed, as the market has taken care of it.

The latest New Zealand Energy Quarterly, released today by the Ministry of Business, Innovation and Employment (MBIE), shows the average cost of electricity paid by residential consumers has fallen for the first time in 15 years.

Average sales-based electricity cost data for the year ended March 2016 indicates the average residential cost per unit of electricity used over the period was 1.7 per cent lower than in the previous year.

?The decrease in residential electricity costs was driven by increased discounting activity and incentive credits, which rose 10 per cent compared to the previous year,? says James Hogan, MBIE?s Manager of Energy and Building Trends.

Competition is what drives prices down, not regulation.

The past year has seen record retailer switching and continued growth in the market share of smaller retailers. Customer incentive and retention credits doubled in the March 2016 year.

The Quarterly Survey of Domestic Electricity Prices (QSDEP) indicator for the June quarter 2016 was also released and reflects changes to lines charges that took effect on 1 April 2016. This shows a 1.5 per cent increase in the national average tariff from the March quarter 2016. The QSDEP provides an indication of what households will pay for electricity over the next year.

Electricity generated from fossil fuels was down 24 per cent in the March quarter 2016 from the previous March quarter. Coal-fired generation was down 54 per cent and gas-fired generation was down 13 per cent.

?The amount of carbon emissions produced from electricity generation was at its lowest level in 20 years,? says Mr Hogan.

With less fossil-fuelled generation, the percentage of electricity generated from renewables was up 5.8 percentage points from the previous March quarter to 82.2 per cent.

I don’t care how we generate our power, I just want the most cost effective method possible.