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Wednesday, 12 February 2014

Power prices report

One of the backgrounds of this years election will be the cost of electricity. The Government's mixed-ownership model will come under fire from the opposition, who will claim that it has increased the cost of electricity to consumers. The Electricity Authority has published a report comparing retail prices charged to consumers over the years.

Here's a summary of what the report finds:
The analysis shows that electricity prices were far below the actual cost of supply for many decades, and that current charges to consumers overall are almost in line with the historical cost of supply.
 In other words, Kiwi households having being paying less for their electricity than it costs to supply, while industrial consumers pay more. There's even a pretty graph to back that claim up:


What's interesting is that the retail charges when up significantly in the 70s, until 1980 when they gradually started to reduce again. So much for government ownership keeping power prices low. Interestingly power prices fell following the late 1990s reforms, but started to rise again in 2001/2002, peaking in 2009 before falling again.