Our 2011 election manifesto - Labour Party

National intends to sell 49% of the shares in these assets. Foreign interests would inevitably
end up owning many of these shares. The sell-off would be a forerunner to full privatisation
in the future. Our major power generators would end up being controlled and largely owned
overseas, and profits would go offshore.
The electricity SOEs are our oilfields of the future. They must remain as 100% New Zealand
owned. That means the government of the day can see they are run in the interests of all the
people of New Zealand, including a commitment to security of supply, affordable power
prices, renewable energy, and energy efficiency.
Labour will retain our three electricity generating SOEs in 100 per cent public (i.e.
Crown) ownership.
The electricity market
The New Zealand market for electricity is not sufficiently competitive to protect consumers
from excessive prices.
National created a pretend market, with monopoly profits reaped at the expense of
consumers.
Absent effective competition, there is no moral justification for allowing the fiction that the
market acts as a proper control on prices. Absent effective competition, a hands-off
approach to pricing enables the interests of consumers to be ignored and abused while
those who hold market power gouge.
Subsequent attempts to rein in monopoly powers in wholesale and retail electricity markets
have resulted in a series of complex rules that make resource management plans seem
straightforward, and still have not achieved adequate competition.
Our pretend market produces some bizarre results. Someone who lives in Alexandra, next to
the Clutha River which produces an abundance of renewable electricity, pays more than
someone at distant load centres. How can that be anything other than a failure of the
market?
The lines part of the system is an absolute monopoly. There is only one set of lines coming
to your house or business. After overcharging and underinvestment by some lines
companies, the last Labour government regulated prices for lines.
While there is some competitive pressure on prices in other parts of the electricity system,
there is no doubt that the wholesale and retail electricity markets are not - and will never be -
perfectly competitive. That is why we have regulatory oversight and complex rules governing
the electricity industry which are not necessary in competitive markets.
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