Geoff Bertram has been documenting the rorting by the gentaillers for decades, indeed since before Max Bradford's so-called reforms. And what to do about it, essentially revert to the ECNZ electricity is not for profit public infrastructure, updated to also encourage heaps of distributed small scale solar and wind generation.
Or maybe it's as simple as the market was a fictitious myth, and back to a sensible drawing board. Yet again the neo-liberal fallacy bought into by successive Governments (both National and Labour) has produced another unpleasant but totally predictable result.
Thank you for highlighting how successive governments have been the largest beneficiaries of the extortionate profits that the largest generators are reaping. Three of the big four generators are 51% owned by the NZ government, however the ownership is set up in such a way that governments are able to distance themselves from the market behaviours. When adverse publicity ensues the same governments can wring their hands and shed crocodile tears, all the while accepting their share of the profits!
As with housing, there are lasting solutions to fixing these monopolies, the single biggest problem is that those with the most to lose will probably be reaching for their Dancing Cossacks.
The big problem for customers is the fixed daily charge, which I had a rude awakening too recently. We had been away from home for 5 weeks & had turned our power off at the mains switch. Thinking we would have a nice cheap month, I was gobsmacked when we received a bill for that period of $180 - we had used no power, that is the charge for 30 days privilege of having a connection. We’re pensioners, we have gas hot water, a log burner, so the only power we use is cooking (1 meal a day), fridge, lights and laptop/phone recharging
Thank you Bryce. Certainly time to reconsider whether the Bradford reforms brought the results they claimed would occur. It would be costly to reverse them, but their entire income would then be available to government, not just half the dividends!
In the meantime the government could set in place an operating charge every time the spot price exceeds a fair figure - $150 or perhaps $200. This would provide immediate benefit to our at risk industries - and show our government was truly concerned with people and their employment. Not to mention our foreign exchange income from dairy, timber etc.
How would it work out if we were to give full ownership of the power stations to the local district councils, held in a fully mutualised trust on behalf of all the local citizens. Then the electricity companies would be periodically forced to tender for the rights to manage the power stations for a set period, and pay a resource use levy for each kWh that they extract from the natural resources, whether water, wind, gas or geothermal.
Such measures would tend towards correcting the behaviour to serve the community interest,
Councils have proven they are incompetent at managing infrastructure. Len Brown wanted to take our shares so he could spend it wastefully.
One of the current problems is that electricity companies are being forced to invest in uneconomic and unreliable power sources like solar and wind and use coal and gas less. The greenies block any attempt to add hydro. There are no countries who have increased wind and solar power generation ratios who haven't had major price rises in power as a result. The current hydro lake issue was entirely predictable given the rubbish snow fall last year and el nino to boot.
The reality is that if we want better pricing on power, we will have to look seriously at coal or dare I say it nuclear power.
Thanks for this overview of the politics and some of the economics, Bryce, but there are two other dimensions that need to be considered. The first is the urgent need to cut emissions - removing fossil fuels from the generation mix - and the second is the generation technologies that are underexploited in NZ (for reasons you cover), locking us into unnecessarily expensive power. See this recent report by RethinkX for. more on the latter: https://www.rethinkx.com/energy
A radical restructuring of the whole sector is not just needed, it's essential!
The direct cause of the current so-called gas shortage is the forced reduction in coal burning.
We're not using the resources correctly, with which we have been abundantly blessed....
What a shame.
And now we are complaining about the consequences,
Look man I grew up in a coal-mining area, with coal smoke left, right and centre. It probably smells a whole lot better than your average tailor-made ciggy.
And scientifically speaking, it's perfectly obvious that we need more carbon in the atmosphere, it's essential for plant growth and agricultural production,
Geoff Bertram has been documenting the rorting by the gentaillers for decades, indeed since before Max Bradford's so-called reforms. And what to do about it, essentially revert to the ECNZ electricity is not for profit public infrastructure, updated to also encourage heaps of distributed small scale solar and wind generation.
Or maybe it's as simple as the market was a fictitious myth, and back to a sensible drawing board. Yet again the neo-liberal fallacy bought into by successive Governments (both National and Labour) has produced another unpleasant but totally predictable result.
Thank you for highlighting how successive governments have been the largest beneficiaries of the extortionate profits that the largest generators are reaping. Three of the big four generators are 51% owned by the NZ government, however the ownership is set up in such a way that governments are able to distance themselves from the market behaviours. When adverse publicity ensues the same governments can wring their hands and shed crocodile tears, all the while accepting their share of the profits!
I studied Regulation of Oligopolies and Monopolies under Doctor Low at VUW. The Whole Post 1984 Fire Sale was a Rort.
A timely expose on Max Bradford's legacy. Excellent piece sir
The Bradford reforms always looked like a rort, and they were. Time to revive ECNZ.
As with housing, there are lasting solutions to fixing these monopolies, the single biggest problem is that those with the most to lose will probably be reaching for their Dancing Cossacks.
The big problem for customers is the fixed daily charge, which I had a rude awakening too recently. We had been away from home for 5 weeks & had turned our power off at the mains switch. Thinking we would have a nice cheap month, I was gobsmacked when we received a bill for that period of $180 - we had used no power, that is the charge for 30 days privilege of having a connection. We’re pensioners, we have gas hot water, a log burner, so the only power we use is cooking (1 meal a day), fridge, lights and laptop/phone recharging
Thank you Bryce. Certainly time to reconsider whether the Bradford reforms brought the results they claimed would occur. It would be costly to reverse them, but their entire income would then be available to government, not just half the dividends!
In the meantime the government could set in place an operating charge every time the spot price exceeds a fair figure - $150 or perhaps $200. This would provide immediate benefit to our at risk industries - and show our government was truly concerned with people and their employment. Not to mention our foreign exchange income from dairy, timber etc.
How would it work out if we were to give full ownership of the power stations to the local district councils, held in a fully mutualised trust on behalf of all the local citizens. Then the electricity companies would be periodically forced to tender for the rights to manage the power stations for a set period, and pay a resource use levy for each kWh that they extract from the natural resources, whether water, wind, gas or geothermal.
Such measures would tend towards correcting the behaviour to serve the community interest,
Councils have proven they are incompetent at managing infrastructure. Len Brown wanted to take our shares so he could spend it wastefully.
One of the current problems is that electricity companies are being forced to invest in uneconomic and unreliable power sources like solar and wind and use coal and gas less. The greenies block any attempt to add hydro. There are no countries who have increased wind and solar power generation ratios who haven't had major price rises in power as a result. The current hydro lake issue was entirely predictable given the rubbish snow fall last year and el nino to boot.
The reality is that if we want better pricing on power, we will have to look seriously at coal or dare I say it nuclear power.
Thanks for this overview of the politics and some of the economics, Bryce, but there are two other dimensions that need to be considered. The first is the urgent need to cut emissions - removing fossil fuels from the generation mix - and the second is the generation technologies that are underexploited in NZ (for reasons you cover), locking us into unnecessarily expensive power. See this recent report by RethinkX for. more on the latter: https://www.rethinkx.com/energy
A radical restructuring of the whole sector is not just needed, it's essential!
What are you talking about?
The direct cause of the current so-called gas shortage is the forced reduction in coal burning.
We're not using the resources correctly, with which we have been abundantly blessed....
What a shame.
And now we are complaining about the consequences,
Look man I grew up in a coal-mining area, with coal smoke left, right and centre. It probably smells a whole lot better than your average tailor-made ciggy.
And scientifically speaking, it's perfectly obvious that we need more carbon in the atmosphere, it's essential for plant growth and agricultural production,
It's all basic School C science.
Outstanding piece. Thanks.
At last, some Aussie banks calling the shots on climate. Time for them to do the same here:
https://www.theguardian.com/news/article/2024/aug/14/commonwealth-bank-paris-climate-agreement-fossil-fuel-companies
Great article! Thanks 🙏🏽
Genitalia's more apt?
Great stuff.
Very interesting thanks. Before I opened the email I thought it was going to be about the Big Four accounting firms!
It is..... they all work together with each other,