TLDR: the big four power companies are cooking the books and the climate.
This winter, a woman who was struggling to afford her huge power bill in New Zealand was told by her power company to try putting more clothes on. Pretty rich advice, given that power companies have hiked power bills up this winter at the fastest rate in a decade.
And while Kiwis shivered through these record high power prices, the four companies that control almost all of New Zealand’s power – Mercury, Meridian, Genesis, and Contact – paid out a near record $1.37 billion to their shareholders.
Our power bills are high because these four power companies are corporate vampires.
Power companies bleeding Kiwis dry
The big four don’t want cheaper power, they want to maximise their profits and their shareholder returns. For decades they have deliberately underinvested in the cheapest form of energy – wind and solar so that they could keep burning coal and gas – the most expensive way to make electricity – to justify their high prices.
They have also actively discouraged the Government from providing any kind of support to help people and communities to install their own solar. So people are forced to hand over ever more cash, because the alternative paths have been blocked for anyone who isn’t already well-off.
Because of these big four power companies, we don’t have enough cheap wind and solar energy… yet. So when electricity demand spikes, they switch on the coal at Huntly and voilà: electricity prices, and power company profits, go up.
These profiteering power companies are cooking the climate with dirty fossil fuels and bleeding households and businesses dry to fund obscenely high shareholder payouts, year after year.
The result? One in five New Zealanders struggled to pay their bill last year. Over 100,000 households couldn’t keep warm. Manufacturers are scaling back or shutting down, costing jobs and draining productivity.
These companies are making pensioners freeze in their flats and Kiwi businesses close their doors, all so millions can flow to their shareholders like wealthy offshore banks J.P. Morgan, Citibank and HSBC.
It’s straight-up corporate blood-sucking. And this Government is just… letting them do it.
How did we get in this mess?
Electricity generation and sale used to be publicly owned and run for the common good. It wasn’t dominated by private shareholders to pay out billions to or profiteering corporations to drain these publicly-funded assets for all their worth.
But previous Governments chose to sell off the energy assets the taxpayer built, like hydro dams and Huntly power station, corporatise and partially privatise the energy system. It was the last National Government under John Key that partially sold off the big four energy companies that have turned into corporate vampires. After Key’s Government privatised them, spending on new renewable energy generation fell off a cliff.
The Government sets the rules that govern the privatised electricity market. Those rules could prioritise affordable, clean energy for all. But, instead, they create a perverse incentive to keep renewables scarce and fossil fuels burning to maximise profits for shareholders.Here’s how: electricity prices get set based by the most expensive form of energy generation being used at the time. Coal and gas are the most expensive, so as soon as they start getting burnt – the price of all electricity goes up, even if it’s from cheap hydro or wind. That’s why these power companies don’t build new cheap renewable energy that would bring power bills down, because keeping coal burning means they can charge more for power.
It’s time to let the sun in and vanquish the vampires
Kiwis have a right to affordable, reliable power to heat our homes and run our businesses. The planet also needs us to phase out fossil fuels.
Luckily, the solution is the same: build more wind and solar and put it in the hands of regular people. Wind and solar are cheaper than coal and gas, cutting both power bills and climate pollution, and they make our hydro lakes more effective as a giant “battery” for winter. That’s why we are calling on the Government to:.
- Offer interest-free loans for household solar and batteries. Rooftop solar lets households generate their own cheap electricity. With interest-free loans, rooftop solar would expand rapidly. Victoria in Australia has ten times more solar than New Zealand because people were supported to install it.
- Consider completely re-nationalising our energy system. Power is an essential service, it used to be fully owned and operated by us. Letting it be run by profiteering corporations hasn’t worked out well so it’s time to consider taking the power back, for the people.
- Consider intervening to cap the shareholder returns of the gentailers until they have sufficiently reinvested profit into new renewable generation. New Zealanders being able to warm their homes is more important than the profits of wealthy offshore banks.
Call on the New Zealand Government to put solar panels and batteries on 500k homes by 2030
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