Why power prices matter

News that the CEO of Contact Energy is now earning $1.7 million a year, or $33,000 a week, has shocked many New Zealanders and reinforces the urgent need for Labour’s NZ Power policy, Labour’s Finance spokesperson David Parker says.
“Currently power companies are allowed to charge excessive prices by pricing all electricity at the price paid for the most expensive electricity produced (often gas fired).
“Under Labour’s NZ Power consumers pay the average, rather than the highest, cost of generation. This saves hundreds of dollars a year for the average household and about 5 per cent for commercial users.
“This is only fair. Sixty per cent of NZ’s electricity comes from hydro, which is the cheapest electricity to produce in the world. It’s fuelled by the energy which comes from our public rivers. At present the public gets little benefit from this.
“I have been challenged by the business community on how I justify Labour’s policy to drop power prices.
“It’s easy.  People are cold. A couple of weeks ago I was in Wanganui. It was a cold day. I dropped into a suburban library. I was told many of the people who come in do so to get warm. They stay for hours on cold days because they cannot afford to heat their homes.

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