John MacDonald: Is it the Govt’s job to make energy prices cheaper?

I got an email from the power company this week, telling me about my weekly electricity use and how much of that is used during my eight hours of free power on Saturdays and Sundays. 

Despite doing all the washing and drying during the 16 free hours of power each week, it was only 20%. 

No wonder the bills are so expensive. And that’s without teenagers chewing through the power like it used to be not that long ago. 

So we probably shouldn’t be surprised by a new survey which says over 60% of people would be in favour of the Government underwriting the cost of new electricity generation, if it meant cheaper power bills. 

This is a survey that was done by Curia for Octopus Energy and the Auckland Business Chamber. The results have been released as we are, apparently, just days away from some sort of significant government announcement about the energy sector. 

But here’s the question: Is it the Government’s job to make energy prices cheaper? 

I think we lost any right to expect the Government to deliver cheaper power prices when the market was reformed by Max Bradford all those years ago. When we got the set-up we’ve got now, which we were promised would mean cheaper power prices. 

Because unless the Government buys back all the shares in all the power companies, then I don’t think it is the Government’s job to make energy prices cheaper. 

What’s more, the idea of the Government underwriting new generation projects is a bit of a slippery slope. Because why should these companies get the Government being a backstop for them if things go pear-shaped? What about other sectors that have to go it alone without the taxpayer to fall back on? 

Energy Minister Simon Watts isn’t saying much, but he’s describing it as something that will be “significant but surgical”. 

My view is that the only way the Government could deliver cheaper electricity prices is by buying back all the shares in the big power companies. Resurrecting the old NZ Electricity Department (NZED). 

But that’s never going to happen. Shane Jones has talked about it, but I think it’s very unlikely. 

And that’s why I think we need to forget about this idea of the Government coming to our rescue. 

We don’t expect the Government to make air fares cheaper. We’ve abandoned the idea of the Government making groceries cheaper. 

So why should we expect it to make power prices cheaper? 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Mornings podcast with John McDonald
from NEWSTALKSB.

Speaker 2 (00:13):
I got an email from the power company this week.
Always loved getting emails from the power company. This one
was telling me about my weekly electricity use and how
much of that is used during eight hours of free
power on Saturdays and Sundays. How much you reckon? Eh,
how much you reckon only twenty percent despite doing all

(00:38):
the washing and all the drying during the three hours
of power, that only accounts for twenty percent of my
total power use. No wonder the bills are so expensive,
and that's with our teenagers chewing through the power like
there used to be not that long ago. So we

(00:58):
probably shouldn't be surprised by a new survey out today
which says over sixty percent of us would be in
favor of the government underwriting the cost of new electricity
generation if it meant cheaper power bills. This is a survey.
It was done by Curia for an outfit called Octopus Energy,

(01:21):
which is one of the small fry power companies, and
the Auckland Business Chamber, and the results have been released
this morning. As we are apparently just days away from
some sort of significant government announcement about the energy sector.
But here's the question I've got for you this morning.
Is it actually the government's job to make energy prices cheaper?

(01:45):
Is it the government's job to do that? What's your
answer to that. The government seems to think yes it is.
And the sixty two percent of people in the survey
thing so these are the ones who say they would
be happy for the government to underwrite new generation projects
if it meant their power bills were going to be cheaper.
They'll tell you what. I think we lost any right

(02:09):
to expect the government to deliver cheaper power prices when
the market was reformed by Max Bradford all those years ago,
when we got the setup we've got now, the setup
that Max Bradford promised would mean. What did he say,
this will mean cheaper power prices? Because unless the government
buys back all the shares in all the power companies,

(02:30):
then I don't think we can expect it to be
the government's job to make energy prices cheaper. What's more
than that, the idea of the government underwriting new generation
projects is a bit of a slippery slope, because why
should these companies get the government being a backstop for them.
Why should they get the government agreeing to pick up
the tab of things go pear shaped? What about other

(02:52):
sectors that have to go it alone without the taxpayer
to fall back on. So back to this pending announcement
from the government. Energy Minister Simon Watts is not saying
too much that he is describing it today as something
that will be quote significant but surgical. Significant but surgical.

(03:13):
That's all the Minister is saying at the stage. So
what I did is I actually asked chat GPT what
it thought the minister might be getting at. Particularly, I
asked the bot what significant but surgical might mean, and
old chat GPT reckons he's saying that the action or
change will have a noticeable or important impact, and the

(03:36):
surgical bit means that it will be quote precise, targeted
and carefully controlled, affected only what needs to be affected
without unnecessary side effects. Brilliant day. So chat GPT reckons
the Energy Energy Minister is promising big, meaningful change that
will be done carefully and precisely, which sounds like something

(03:56):
more significant than just agreeing to underwriting new power generation projects,
doesn't it. My view is that the only way the
government could deliver cheaper electricity prices is by buying back
all the shares and the big power companies, nationalizing the sector,
resurrecting the old New Zealand Electricity Department that end zed that.

(04:17):
That's never going to happen, all right, Even though I
think it's the only way forward, it's never going to happen.
Shane Jones talked about it recently, but I think zero unlikely.
And that's why I think we need to forget about
this idea of the government coming to our rescue. We
don't expect the government to make airfares cheaper. We've abandoned

(04:40):
the idea of the government making groceries cheaper, so why
should we expect it to make power prices cheaper.

Speaker 1 (04:48):
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