23 Apr 2013

Labour says Govt running scared over energy policy

9:59 pm on 23 April 2013

The Labour Party says the Government is running scared of its energy policy after ministers claimed its proposed emissions trading scheme would push up power prices.

Labour and the Greens intend setting up a single purchaser of electricity, called New Zealand Power, which would then pass on savings to consumers.

Finance Minister Bill English says both parties' Emissions Trading Schemes would increase power prices.

But Labour's finance spokesperson David Parker dismissed Mr English's criticism on Tuesday.

"It's wrong and they know it's wrong. They're spooked by this, they know that people have been overcharged for their power. Now, they're just trying to mislead about the Emissions Trading Scheme."

Mr Parker said under Labour's policy, those power stations that do not produce carbon won't be charged.

He said these provide about two-thirds of the country's electricity generation.

Consumers would carry risk - authority

The Electricity Authority says one implication of the Labour/Greens policy is that consumers would more carry more risk if generators make poor decisions.

Chief executive Carl Hanson told Radio New Zealand's Nine to Noon programme on Tuesday the key trade-off under the current regime is whether competition is strong enough to keep consumers happy.

Mr Hanson said under the Opposition's proposal, the trade-off is whether there would be enough incentives to keep generation costs low and the potential for political interference.

Under a central purchaser, the consumer - not the shareholder - would pay the price of poor decisions by generators, he said.

"To the extent that they over-estimate demand, or choose inefficient plants, because they've got to have a pretty complicated algorithm to work out what's the most efficient.

"Then those costs will be passed on to consumers and shareholders would essentially be shielded from those risks."