NZ Power

Labour still clueless as to what to do – start by throwing out the really wacky policies

Labour really are lost, they are cleaning out their dead wood policies and swallowing plenty of dead rats.

Some in Labour sure are going to have their vitriolic words thrown back at them, particularly the nasty comments they made over raising the retirement age which has now been dumped as a policy.

The Labour Party has officially dumped its policies to introduce a broad capital gains tax and raise the retirement age.

Steps to remove the two policies from the party’s policy platform were approved by delegates at the party’s conference today.

Labour leader Andrew Little would not rule out a comeback for the policies in the future, but said if it got into Government in 2017 it would not introduce them without campaigning on them again in a future election.

Read more »

The Green Taliban cost us the blunt end of a Billion dollars, and counting…

That ‘nice’ Mr Norman and his Labour sidekicks cost this country a fair amount of money

Of all the MPs who might have asked awkward questions about National’s state asset sales programme, few would have guessed it would be the leader of the party which would have happily sold the lot.

A year to the day since the NZX debut of Meridian, the largest of the partial sales, ACT leader David Seymour delivered his first question in the House on Wednesday, with the pace of a 13-year-old giving a reading he couldn’t wait to be over.

But in asking about the rising share prices of the former state-owned electricity companies, he raised an issue which every other politician now seems unwilling to ask out loud.

Hundreds of millions of dollars have been accrued by investors since the sales, especially since start of September.

The issue deserves another public hearing, as since it became clearer that National would govern again, those who purchased the shares have seen their investments boom, as the market reassesses what they are worth under John Key.

Seymour meant to make an attack on just the Opposition for its attempts to undermine the sales through the threat of regulation, NZ Power. Instead he raised a wider point.

How much did the political folly – from both sides of the House – cost the taxpayers, who as Seymour pointed out, will have to make up the difference?

Well, we lost a cool bil in actual sale income for the government to use to, oh, I don’t know, assist with housing or child poverty,say.  And all the investors that were scared away lost out on earning their share of the gains.  Gains that are now going to the very institutional investors that the Green Taliban wanted to prevent getting fat at the expense of every day mum and dad investors.   Read more »

Labour/Green Power Plan – “Crazy”

The CEO of Contact Energy has labelled the Green/Labour power policy “crazy”.

If Labour and the Greens imposed their proposed power policy Contact Energy would be forced into a complete restructure, chief executive Dennis Barnes says.

Earlier this year, the parties announced plans to set up a single buyer, NZ Power, to buy all electricity generation at a fair price, promising to cut the average New Zealander’s power bill by up to $330 a year.

Speaking to The Press after the company’s annual meeting in Christchurch today, Barnes said the policy would require a structural change for Contact’s business and the electricity industry.  Read more »

NZ Power’s successful trial in Latin America rolls on

NZ Power‘s successful trial in Latin America rolls on.

Venezuela’s hugely successful goal of providing cheap power to its voters has the unexpected bonus of the Greens goal of reducing our carbon footprint.

No need to use that polluting car to get to work, it’s shut.

Large swaths of Venezuela have been paralysed by an electricity blackout that brought chaos to the capital and fuelled public anger at the government’s failure to keep the lights on in the oil-rich nation.

At least 70 per cent of the country was plunged into darkness after the main electricity distribution network collapsed, a fact Nicolas Maduro, the country’s leftist president, blamed on “sabotage” by his Right-wing enemies.  Read more »

LEAKED: Labour’s plans to use taxpayer money to promote policy

The Labour party continues to leak and this morning I have received documents outlining just exactly how the Labour party plans to echo their $800,000 rort with the pledge card and fund the promotion of their NZ Power policy from taxpayers pockets.

The documents are very clear. They state:

The Leader’s [Office] will provide a targeted mail drop to support upcoming public meetings on NZ Power. We’ll provide the target list, the letter, the collateral, printing and deliver the target mail to electorate offices.

In other words the costs associated with the promotion of a Labour party policy is to be billed to parliamentary services. They go further:

Note: Larger print runs are much more cost effective. So we’ll be looking to combine the print run of as many meetings as possible. 

Nice that they are trying to get as much as possible for the taxpayers dollar.  Read more »

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Labour-Greens ‘nightmare’ power policy is ‘bass-ackwards’, says Wolak

Oh dear me, as I blogged yesterday Labour’s go to academic that they quoted extensively in their NZ Power release with the Greens has turned on them, describing their policy as ‘bass-ackwards’ and a ‘nightmare’.

David Parker is beside himself, issuing desperate press releases.

The sad part is that this is largely passing under the radar because the media are in a huff and trying to manufacture the demise of our democratically elected Prime Minister and at the same time accusing him of anti-democratic activities.

Some media though are focussed on their jobs.

The American academic whose work underpins the Labour Party’s electricity policy says New Zealand’s existing market arrangements are starting to work better and should be improved further.

In a wide-ranging interview with BusinessDesk, Professor Frank Wolak of Stanford University described the Labour-Greens NZ Power single buyer policy as “a sham that might make me feel a bit better“, but was the wrong weapon to attack “runaway” retail electricity tariffs, which he says are the real problem in current market arrangements.

The Green/Labour bloc promoting this ‘sham’ policy are going to be very upset. As I have said before they have extensively quoted Wolack many, many times.

Wolak says the NZ Power policy, which would unpick a 25-year-old experiment in electricity market design in favour of a centrally planned model, “may not even solve the problem, which is runaway retail prices.”   Read more »

#HeyClint – What we have to look forward to with NZ Power

When the Green/Labour bloc launched their re-nationalisation of our power industry one of the models they suggested that we should look to was that of KEPCO in South Korea.

I blogged about it at the time.

Gutless Green party staffer and blogger at The Standard, Clinton Smith aka James Henderson aka Steve Pierson had this to say at the time.

Which sounds great doesn’t it? But what is reality?   Read more »

Fran O’Sullivan on Green/Labour power sabotage

Fran O’Sullivan outlines her thoughts on the Green/Labour power sabotage:

It’s blatantly obvious that Labour and the Greens have been attempting to short the returns the National-led Government expects to receive through next week’s Mighty River Power float.

Yup, and the gloating of the likes of Gareth Hughes in his now infamous Hey Clint moment was brutally apparent.

[T]ilting at the style of the political intervention and asking the two parties to withdraw their interventionist plan is a waste of space. Not because of their own rationale in doing so (this was soundly based). But because Labour leader David Shearer and Greens leader Russel Norman don’t give a damn about such requests at the midway point of the electoral cycle.

The 10 leading business lobbyists – including major leaders such as BusinessNZ’s Phil O’Reilly and the Chamber of Commerce’s Michael Barnett – who sent a public letter to Labour and the Greens this week – know this in their bones.

They know that the two parties are “not for turning” (at least in the short term). It makes political sense for the politicians to damn the power companies as rapacious commercial beasts, led by overpaid directors and chief executives who will suck all the spare cash out at consumers’ expense.

This tactic works well for Labour and the Greens with their own political power base. Their supporters hate fat cats. Demonising the power company bosses could rile them enough to ensure more of Labour’s and the Greens’ voting base actually turn up to cast a vote in 2014. Or so the hope goes.  Read more »

Greens/Labour power scam means increased taxes

In Monday’s DomPost (not online) was this article by Lewis Evans about the Greens/Labour power scam. Basically it concludes that the only way that they can deliver lower power prices to consumers is to increase taxes on those same consumers.

In other words there is no possibility that power prices will be cheaper, and that they are basically running an electoral scam.

THE Greens/Labour proposal for an electricity single-buyer model with steep household electricity price discounts is economically flawed.

It requires a taxation increase that is similar to the reduction in electricity bills.

Electricity will be no cheaper to produce. It pre-empts the wise use of water within the electricity market as well as between electricity and other uses. It reduces the effectiveness of the ETS scheme in limiting emissions.

The proposal forces generators with existing hydro and geothermal plant to supply blocks of electricity at prices far below the cost of additional electricity production with new plant. Although the electricity market is reasonably competitive, long established firms are profitable. They have low capital costs, and are paid a price set by aggregate New Zealand demand equalling supply.

This is the real cost of electricity to the economy. When demand for electricity is increasing this price is equal to the cost of the next new generator. The electricity market is no different from any market where expansion requires increased establishment costs. In the case of forestry, there is no market power and established firms close to ports may be very profitable compared to plantations established later in the hinterland.

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.  Read more »

So you think Labour and the Greens will just give you $300 of free power?

If you believe that then I have a bridge I can sell you.

The Greens and Labour want you to only look at their NZPower solution in isolation, they don’t want you try and work out how all their other policies will work together with that.

Labour’s ETS plus the Greens ETS alone will see the $300 wiped out in extra carbon taxes. Then there is this long list of taxes and levies and law changes that the Greens also want…they certainly won’t be revenue neutral…and this is just on transport…it ignores all their other taxes and controls they want in other sectors.  Read more »