MCY Mercury NZ ( MRP Mighty River Power)

[Zaphod]

You see. There you go talking sense again.

Unfortunately, common sense won't stop them making political capital out of it, if they think they can.

The most unfortunate part of this is that surveys of voters continue to show that they believe that the generators and retailers are to blame for the increases. It appears to be a case of not letting facts get in the way of a great [election winning] story!

[horus1]

Compare vectors report with MRP on both volume and future outlook. The distribution charges in AK have declined but not the consumer prices.i.e. The generator /Retailers have gobbled up the reductions for themselves.

[Harvey Specter]

Compare vectors report with MRP on both volume and future outlook. The distribution charges in AK have declined but not the consumer prices.i.e. The generator /Retailers have gobbled up the reductions for themselves.

I believe trans powers prices have gone to eliminate any benefit from the reduction in distribution costs.

[horus1]

That is not true over a 5 year period.You only have to look at the profits of the generator /retailers compared with all distribution companies to see what has happened. Bring on the labour govt with some sensible electricity arrangements. NZ is to small with to much concentration of generation /retailing to have a market that works.

[horus1]

I was a senior figure in setting up the NZ Electricity market. It was turned down in initial studies because of the small size of the NZ market and it has been found to not work in practise . Costs are higher thanin the past and customers are being ripped of . It is not about the Wolak report.

[fish]

labour party regulation is a nightmare that will destroy investment and competition in this country.
transpower has invested heavily to ensure we have certainty of supply-as have lines companies keeping costs up .
Generators have also invested heavily and we are no longer so dependent on hydro .
In fact it is unlikely that we will need new expensive generation for a decade so prices will stabilize with intense competition.

[horus1]

Transpower has over invested . Loads are reducing and will continue to decline . Technology is driving major change in the industry The theoretical cost of generation is the short run operating cost which for hydro is close to 0

[mouse]

Transpower has over invested . Loads are reducing and will continue to decline . Technology is driving major change in the industry The theoretical cost of generation is the short run operating cost which for hydro is close to 0

Now, lets see. Generation costs close to zero. Lets say .05cents per kWh. Lets say we get allowed 20% mark up on that, so 0.01 cents per kWh. How much will the investors get? Or do we just get our cash back?

[Vaygor1]

I was a senior figure in setting up the NZ Electricity market. It was turned down in initial studies because of the small size of the NZ market and it has been found to not work in practise . Costs are higher thanin the past and customers are being ripped of . It is not about the Wolak report.

Hi Horus.

From your post, can you clarify just what was ‘turned down in initial studies’ and what was ‘found to not work in practise’ ?

In any event, you can be rest assured that the Labour's 'policy' is all about the Wolak report. It was the very foundation for it, and it is still cited by Labour:

Go to http://campaign.labour.org.nz/lower_power_prices and click on the Full NZ Power policy link at the bottom to open the pdf.
Go to page 7. The primary piece of evidence Labour quotes; the number 1 bullet point is the Wolak report and the very basis behind Labour's Single Buyer initiative. And since announcing this initiative, Professor Wolak has essentially condemned it, and there are links galore to prove it.

Nearly all of the the other evidence quoted in the 'policy' are either anecdotal, subjective, spin, statistical lies, and/or a farcical attempt at comparing little old NZ's case with Canada, UK, and the US.

Is the current system perfect? Of course not, no system is, but Labour’s insertion of a single-buyer middleman (ie another layer of complexity and more cost) will separate generation from retailing in the process and create 10 times more problems than it solves, all adding to even more additional cost. But don't take my word for it, ask Wolak.

[Harvey Specter]

Now, lets see. Generation costs close to zero. Lets say .05cents per kWh. Lets say we get allowed 20% mark up on that, so 0.01 cents per kWh. How much will the investors get? Or do we just get our cash back?

On that basis, any investor with a rental house over 30 years old (ie. the mortgage should have been paid off) should only be able to charge rent to recoup maintenance costs?

Yout dont stop earning a return on captial just because you should have ('in theory') repaid the original cost already.