Scorn or Debate – what NZ Power might mean?
Since the release of the NZ Power proposal there has not been a solid, logical debate about what NZ Power might mean, and the current problems inherent in the electricity market say New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive John Walley says, “What we witnessed this month in New Zealand politics reminded me of a line from Bob Edlin in Management Magazine a few weeks ago, Bob said “If scorn is better than robust debate at shaping good policy, we are in good hands. ” That pretty well summed up the Government’s response to the NZ Power proposal from Labour and the Greens. Business New Zealand has urged Labour and the Greens to revoke the policy in an open letter. The letter reads to say that higher electricity prices would better serve New Zealand businesses incentives to innovate. Would this really be the case? These are echo’s of the comments made by the same group before the unbundling the local loop.” “Sadly scorn, distortions and exaggerated characterisations, heaped on ideas and individuals seem to be an ingrained response from many; dismissing any new ideas at odds with the status quo.” “Take a look at http://en.wikipedia.org/wiki/New_Zealand_electricity_market you don’t have to read very far on that link to see there is already a single regulator that balances supply, demand and price. Not very different than NZ Power as we read the proposal. The key difference is the pricing mechanism, not the entire system. “Currently we have a Long Run Marginal Cost approach (LRMC), where the regulator balances the market in terms of supply and demand and pays all generators according to the highest cost generator required to supply in the market. Prices escalate based on the cost of new generation and fuel; higher electricity prices justify ever higher prices […]