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Lefter 61 ~ NZ power shares in the heart of Texas

May 8, 2013 by emweb

Do you consider Texas USA to be like Albania and/or North Korea? Me neither. However, Stephen Joyce fails to see the distinction.

When Labour and the Greens together announced a policy that makes the New Zealand resource of New Zealand-generated power more affordable to New Zealanders (does any of that sound wrong or bad so far?), National’s tory twerps immediately used the Communist card, saying they were trying to make New Zealand like Albania and North Korea. Unfortunately for them, it’s Texas that uses the very model the Labour-Green announcement detailed. Doh!

As far as ‘scaring investors off’, why should I care? Investors, correct me if I am wrong, are those who put money into things that will reap them big rewards. Investing and morals, unfortunately, hardly ever go hand-in-hand. The two main divers of investing are fear and greed, after all. The massive profits our energy utilities have been making are very enticing to these people. Now it’s not so attractive? Boohoo, because you’re looking to profit off the poverty our overpriced power is creating, or at least adding to. You should be ashamed.

We generate this power – we’re not importing it. It’s a New Zealand resource. We have rights to it – well, we should have, as New Zealand citizens.

The model is as follows: privatising New Zealand’s power utilities meant the resulting entities created have been able to develop massive profits. For themselves. In the fond imaginings of those on the right, numbers of entities offering power means they will ‘compete’. This competition is supposed to result in efficiency and lower prices. Yet the market is not a moral or caring thing. It’s just a profit-generating device divorced from human toil, production and daily reality.

Unfortunately, the competition model is usually just a fond imagining. The actuality is quite different.

With the New Zealand power model, it’s easy to see how this happened. It uses a spot pricing model that dictates that the highest spot price in a given period sets the overall price for all power generated, so it fails to take in the difference between very cheaply generated power (of which we have plenty) and the most expensive/least efficient. This is grossly unfair and, if anything, keeps the expensive and inefficient generation going, since it sets the price for the rest. Cue massive profits to those private entities.

A few years on, we’re all paying a lot more for the power we need,, despite being a country rich in generation capabilities, compared to most. In effect, the situation is the same as a monopoly except that the profits are spread around a few more capitalists. And, of course, this is the reality that Key, Joyce et al know only too well, what they really expect and also, unfortunately, what keeps them in power. It’s friends in high (ie, moneyed) places, with the power and the money, that keep Key and his cronies where they are, as they serve their needs and not ours. That’s why National can afford (and does afford) much better spin doctors to pull the wool over our eyes.

I know this is a fact Labour greatly laments, but honestly, spin is hardly rocket surgery. Labour often makes PR mistakes that are simply stupid. I don’t know who Labour hires, but seriously, it’s not hard to get better advice. At any price. Or at least, it’s potentially feasible to work out which advice is good and which is not.

But with this one, Labour is clearly onto something. As so many Labour supporters (or at least, occasional Labour voters like myself) have been saying for years, Green and Labour are a natural fit. If only Labour would stop being so damned arrogant about it. Helen Clark letting the moratorium on genetic engineering lapse did more to turn me off Labour last decade than anything else.

We applaud this change.

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