Wholesale power prices are high at the moment, factories are shutting down, and big users are whining to the Minister to intervene and lower prices. And unsurprisingly, Shane Jones, who never saw a donation he didn't like, seems receptive:
"The gentailers no longer operate in New Zealand in a way that enhances competitiveness number one. Number two, the gentailers no longer operate in a vein that boosts or gives greater primacy to the greater interests. Therefore there are provisions under the existing electricity legislation that enables the Crown to use a code of conduct which has legal force to change their behaviour," he said.But since the Bolger government sold Contact Energy and the Key government part-privatised Meridian, Mercury, and Genesis, they have had no obligation at all to care about "the greater interest". Their sole legal duty is to make a profit for their shareholders, by gouging as much money as they can from their customers. If Jones doesn't like that, and wants an electricity system that works for us, rather than being a price-gouging cartel, he knows the answer: re-nationalise it, and take back what National stole.
Meanwhile, its a bit rich for the major energy users group to be complaining. They've known that the market works like this for 25 years. They are large, well-capitalised companies. If they wanted lower prices, they've had 25 years to build cheap, renewable generation to drive the expensive, price-setting fossil stations out of the market. But they haven't, because that would be investment, as opposed to mere rent-seeking. They're simply reaping what they sowed. And if the leopards are now eating their faces, I see no reason not to have some popcorn while they scream.
