Google
 

Aardvark Daily

New Zealand's longest-running online daily news and commentary publication, now in its 19th year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.

Content copyright © 1995 - 2014 to Bruce Simpson (aka Aardvark), the logo was kindly created for Aardvark Daily by the folks at aardvark.co.uk



Please visit the sponsor!
Please visit the sponsor!

The power to rort

10 February 2012

New Zealand is blessed in having an abundance of natural, renewable energy sources it can (and does) tap to provide cheap, environmentally benign electricity.

Not for us, the exploding fission reactors of Fukishima.

Not for us, the CO2 belching coal-fired generators used by most Western nations.

Instead, we have hydro, geothermal and wind power to cover the majority of our electricity generation requirements.

So you'd think, in an era when carbon-offsetting is a very expensive burden on power generation in other countries, NZ's power prices would be stable -- ensuring that consumers and industry were able to fully utilise this resource for best effect.

Alas, that seems not to be the case.

The lines company Transpower has said it'll be hiking its charges by around 20% to cover maintenance and expansion work on its grid -- and those price hikes will be passed on to consumers.

Now there's a giant rort going on here from two directions...

Firstly, Transpower is an SOE and as such, it pays a very healthy dividend to the government by way of profits earned each year.

That dividend is effectively taxation -- the silent taxation that we often fail to consider when calculating the total rate of tax levied on Kiwis.

The government says that as an SOE, Transpower operates just like a private company and has an imperative to produce a profit for its shareholders (the government) -- which sounds fair enough.

However, every private company I know of also has an imperative to set aside some of its profits to cover future costs -- so why hasn't Transpower?

Instead of behaving like a private company, Transpower has instead paid the money it should have been setting aside in dividends to government and now, when it needs that money, it simply hikes its prices. That could never happen in private industry and thus makes a mockery of the claims that an SOE is just like any other business.

Transpower has a monopoly on the provision of transmission lines in NZ and, as a monopoly, it can charge whatever it wants, with consumers just having to suck it up. In effect, the increase in line-charges constitutes a tax-hike by stealth and that's not right.

But then we ought to look at the power retailers who are taking the increase in line charges and passing them on -- with an additional margin of their own.

WTF?

Clearly, many power retailers have seen the proposed hike in line-charges to be a great chance to lift their own profits while blaming Transpower for the increases. I cry foul on this one too!

Of course this situation will only get worse when the government sells-down state ownership of SOEs in the power sector. At least under the current ownership, the profits from all this gouging goes into the state's coffers where it is of benefit to all Kiwis -- by way of funding roads, schools, education, healthcare etc. Once those assets are partially privatised, huge chunks of those profits will end up in private bank accounts or be sent offshore -- effectively making NZ a poorer country.

I think it's time we remembered that just because someone has been elected to parliament doesn't make them smarter, more ethical or more astute than the average Kiwi. In fact, I would argue that it means the opposite.

Government has been leveraging its own position within the power oligopoly to rort the public and impose a nasty stealth-tax. Now it's preparing to privatise that "right to rort".

How long can this continue?

Please visit the sponsor!
Please visit the sponsor!

Have your say on this...

PERMALINK to this column

Oh, and don't forget today's sci/tech news headlines


Rank This Aardvark Page

 

Change Font

Sci-Tech headlines

 


Apart from the kind support of the sponsor, Aardvark Daily is largely a labour of love that involves many hours of hard work each month. If you appreciate the content you find here (or even if you don't) then please visit the sponsor and also feel free to gift me a donation using the button above.

Remember, this is purely a gift, you'll get nothing other than a warm fuzzy feeling in return.


Features:

Beware The Alternative Energy Scammers

The Great "Run Your Car On Water" Scam

 

The Missile Man The Missile Man book

Previous Columns

Is this a Martian fart?
Interesting observations are being made on the surface of Mars...

Safety, at all cost?
I hate it when the excuse of "safety" is used to bludgeon people with the club of bureaucracy...

The crumbling of effective copyright
Pirate Bay is down...

The pain in Spain
Big news last week was that Google had decided to delist all Spanish news sites from its Google News index...

Sony, stop digging!
It's not often I write about the same company, product or service for two days in a row but today is one of those days...

Sony: Netflix is a form of piracy
Okay, the title of today's column is a little misleading, but not by much...

Windows, too good to make a profit
I was surprised to read today that Windows 10 will almost certainly be a loss-leader for Microsoft...

A moonbase? Woohoo!
I recall that one of the first works of science-fiction I read was a short story called Fall of Moondust by Arthur C. Clarke...

Geek Christmas time again
It's time for the annual Aardvark "What to get a geek for Christmas" edition again...

What price an innocent life?
What is the value of a human life? ...