Geoff Bertram: energy economist on the Greens calling for the Government to bring down power prices

The Green Party's written to Government ministers asking them to use their majority owner status to pressure major gentailers to reduce power prices.

Co-leader Chlöe Swarbrick says shareholding ministers, Simeon Brown and Nicola Willis, can write to the gentailers and require them to do more on energy hardship programmes. 

She suggests they could also call for retail prices not to surpass inflation.

Energy economist Geoff Bertram says it's time action was taken to bring down the impact of the major gentailers.

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Episode Transcript

Speaker 1 (00:00):
Now the Green Party. As we've discussed on the show,
the Green Party has written to government ministers urging them
to intervene in the electricity market before winter. They want
ministers to cap the increase to household power bills, demand
that Gen Taylors scale up their hardship programs and also
give out low and then themselves as the government, give
out low interest loans, so houses going to install solar.
Jeff Bertram is an energy economist who's been working on

(00:21):
getting power prices down since the nineteen eighties, and he's
with us. Hi Jeff, Hi, Mate, if you've been working
at it since the nineteen eighties, do you reckon? This
is your year? It's going to.

Speaker 2 (00:30):
Work all right. So it's about time, and with an
election coming up, it's a chance for all the political
parties to think up something sensible and effective to bring
prices down and make it affordable for households. It really
is time that we dealt through the exercise of monopoly
power by the Gen Taylor's, Transpower, the lines companies, the

(00:52):
whole bunch of them. And the difficulty is that, firstly,
when we changed all the electricity into a moll market system,
we did not put in place the regulatory restraints that
you would expect to prevent monopoly from breaking out, and
Parliament has subsequently left the government actually not that many

(01:14):
things that it's allowed to do to drive prices downs
unless the government gets a spine and takes actions such
as putting a windfall tax on the gentailors when they
profit here from dry years, taking the carbon tax off hydroelectricity.
I mean, there's about a billion dollars a year that
consumers are paying in carbon tax on their electricity, and

(01:38):
that is going to going to the gentails, not to
the government. That could all be rebate, you know, we
can all be clawed back and rebated through the customers.
There's tons of stuff that can be done, but it's
actually it's quite hard to spot where those openings are.
And the Greens are trying very hard, and good on
them for trying to think up constructive things that government

(02:00):
can do right away in order to get a handle
on the problem.

Speaker 1 (02:04):
Okay, let's look at the Greens. Is there anything in
what they've announced today that actually strikes you as being
worthwhile to explore?

Speaker 2 (02:11):
Yes, a lot of things are the first thing that
they've suggested is that because the government is fifty one
percent shareholder, and and the gentol that they should be
leaning on the boards of those companies to get prices
down to the cap the rate at which they increase prices,
but ideally bring them down to limit the amount of
dividends that they pay out.

Speaker 1 (02:32):
But Jeff, they're not going to do it. I mean,
Nikola Willis was on the show half an hour ago
telling us they're not going to do it because they
need the money themselves, because the country's broke.

Speaker 2 (02:39):
Yeah. Well, let's face it. I mean, a lot of
the profiteering that's going on from the electricity, which is
driving poorer households to the war is actually, you know,
part of the government's tax take, which is keeping nicular
Willis's budget and balance. Let's non minse words about this.
In so far as you've got a predatory electricity industry

(03:00):
easing people's budgets, the house that the government is part
of the predation.

Speaker 1 (03:06):
Following to take it to its logical conclusion, then does
this government actually want to drop prices.

Speaker 2 (03:12):
No. The whole point about the high prices and high
profits is that is about a billion dollars a year
going into the government's coffers and without which Nichola Willis
would be struggling with her coming upcoming budget. So she's
not going to be on side with doing the things
that the Greens would like her to do as a
shareholding minister. I mean they would like her to pull

(03:33):
the reins a bit and check the extent which the
government's own, the government owned or the mixed ownership models
which the government has a big share are able to
exercise their market powder squeeze consumers. Consumers obviously would like
Nikola Willis to get in there and sort out the

(03:54):
pricing issues, and I agree with them. I think that
it's been a great, pretty mix. Under the mixed ownership model.
The government's become sort of ad dixid to the dirberty
nsita that tax is coming into electricity and we need
to break that addiction.

Speaker 1 (04:11):
So tell me off the two things. I'm going to
give you a couple of ideas, and you tell me
which one you like the most. Right, the OECD has
suggested that what we need to do. This isn't the
report that came out last week that we need to
have extra generation, like firming generation that goes in there.
And I'm presuming floods the market. The second idea is
Winston Peter's idea, which they're going to campaign on this year,
which is breaking up of the gent tailors. Which of

(04:31):
the two do you prefer?

Speaker 2 (04:34):
Well, I like the breaking up of the gentailors burning
as part of a wider package. And I think the
OECD coming from outside it doesn't fully understand how the
ucal and electricity system operates and what we're the competitive
pressure is coming from. Now. The competition for the electricity
market is not among the gent tailors or within the
people playing in the wholesale market. The big competition is

(04:56):
outside the market. It's rooftop solar, It's farmers putting solo
raise out in their fields and putting up little wind farms.
It's the prospects for big offshore wind farms may be
owned by complete the independent parties and coming into the
market from the outside. And that's the real competition that
could break the power of the current lot of gen
papers and transpowerf The difficulty is that we've got a

(05:21):
market set up that sort of blocks that out.

Speaker 1 (05:24):
But you know what you can do it though, through
the power of the government, can't you? Government can act
as that person if it wanted to, or that independent party,
but it probably doesn't want to, as you say, Jeff,
good to talk to you, Jeff Bertram Energy Economists. For
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