A lobby group for large electricity users says the present market is working and rejects plans by the Labour and Green parties to set up a single buyer of electricity.
The parties are proposing a single Crown entity called New Zealand Power that would buy electricity from power generators at a set price based on the cost of production plus a rate of return, then pass the savings on to consumers.
Labour and the Greens say that would save the average household $300 a year.
Major Electricity Users Group executive director Ralph Matthes says the current market is working, and the Labour-Green proposal is a return to the model of the 1980s, which resulted in forced blackouts in 1992.
He says as a result of that it was decided that ElectroCorp could not run the entire system, but that competition and an assessment of risk by multiple parties was needed, which is what a market does.
Mr Matthes says the proposal, in effect, expropriates some asset value from existing generation owners and is a recipe for disaster for investor confidence in the industry.
He doubts the model would produce savings, and says it would also require retail power prices to be regulated to ensure any savings that were made were passed on.
Single buyer models work, says energy analyst
Energy analyst Simon Terry says single buyer models are common overseas, and they work.
Mr Terry says this proposal makes the regulator the single buyer of electricity, which reinforces its ability to set prices and direct the shape of the electricity system overall.
"So what you have is a regulator with an explicit mandate to act in the public interest and they occupy the commanding heights of the electricity system, rather than commercial players."
Mr Terry says the model allows consumers to benefit from a regulator determining what is a fair price and generators get more certainty because they get a guaranteed return once their assets are accepted for regulation.
