The headline says: Greens/Labour made up ‘super profit’ claim for shonky power policy – source.
The story is behind the paywall but explains that Stanford University professor Frank Wolak said LabourGreen took his figures, on which they based the rationale for the policy, out of context to suit their own agenda.
In another NBR story, Professor Wolak says New Zealand’s existing market arrangements are starting to work better and should be improved further.
In a wide-ranging interview with BusinessDesk, Professor Frank Wolak of Stanford University described the Greens/Labour NZ Power single buyer policy as “a sham that might make me feel a bit better” but was the wrong weapon to attack “runaway” retail electricity tariffs, which he says are the real problem in current market arrangements. . .
. . . he made it clear he did not calculate the $4.3 billion figure which critics say are proof of excessive power company profits and a consumer “rip-off”.
“That certainly attracted a lot of attention, most of it unwarranted,” he said.
Prof Wolak says the NZ Power policy, which would unpick a 25-year-old experiment in electricity market design in favour of a centrally planned model, “may not even solve the problem, which is runaway retail prices”.
Prof Wolak urged more competitive reform in electricity generation and retailing and far tougher regulation of the monopoly parts of the system: the Transpower national grid and local electricity distribution networks.
“It may look good, but it’s got lots of challenges,” he says of the Greens/Labour policy. “You’re throwing the entire baby out just to get rid of the bathwater and you’re going to start over, as if you have all these problems.
“My argument is that some of the changes since 2009 are pushing in the right direction,” says Prof Wolak, whose 2009 report for the commission found evidence of electricity generators wielding market power at different times, to maximise the value of their generation efforts. . .
Labour’s economic spokesman David Parker who was behind the policy rejects the criticism.
There’s no surprise in that when the man whose figures he used says they’ve been taken out of context and the policy wouldn’t work.