Remember this guy?
Yes it’s former National Party Energy Minister Max Bradford. The same Max Bradford whom I recall Paul Holmes continually lampooning in the lead-up to the 1999 election by replaying a clip of him saying:
…competition would bring electricity prices for the consumer down.
Well, it hadn’t by 1999 and, as the Commerce Commission has found, it still hasn’t. Electricity consumers have been ripped off to the extent of $4.3 billion since Bradford’s reforms came into effect according to the research conducted by Professor Frank Wolak of Stanford University for the Commission.
What’s worse is that according to the Commerce Commission it has all been perfectly legal.
The Max Bradford solution was to split the old Electricity Corporation up into four corporate entities to force them to act competitively. They privatised one of them, Contact Energy, in 1999. Fortunately, National lost office before they managed to hock off the other three, Meridian Energy, Genesis Energy and Mighty River Power.
The competitive model has been shown to be a miserable failure. So what’s the current Minister of Energy Gerry Brownlee’s solution?
Mr Brownlee said that the Government was prepared to make big changes to the electricity industry to stop massive price rises.
That included examining the market model introduced in the late 1990s by the former National government and the possibility of breaking up big state-owned retailer-generators such as Meridian and Genesis, he said.
He doesn’t go as far as using the “P-word” that National Ministers have been prohibited from saying, but it’s pretty clear that he’s thinking about breaking up and privatising the state-owned electricity generating companies, which is really just finishing Max Bradford’s unfinished business.
At least with three of the big generation companies in state ownership, much of the ill-gotten profits remain in New Zealand in the Government coffers. With what Brownlee is hinting at, the profits would head off overseas to the shareholders of big energy corporates.
Eddie over at The Standard has a different idea.
Buy back Contact (work out a fair share price and do it through legislation). Put the whole thing back into one and set it some simple goals: reliable supply at a steady, low price and phasing out fossil fuels.