Samian, there wasn’t general dissatisfaction with the electricity system prior to Max Bradford’s reforms. You will have to understand though that his reforms were the natural culmination of reforms introduced by the prior Labour administration, you know, which included the corporatisation of most states assets and about which David Lange so strongly reassured us on many occasions were not a prelude to privatisation………

The first major reform of the electricity industry was the splitting off of the distribution network, and the creation of lines companies. We were told this was the democratisation of these assets, as the shares would be distributed to electricity consumers, and that way we would actually OWN these wonderful assets but in a different and presumably more valuable way than how we actually owned them previously. This was the ineffable “property owning democracy” so beloved of the Friedmanites and so effectively espoused by Margaret Thatcher, when she did the same thing with so many of the UK’s assets, including the very homes people lived in.

This was the true magic of practice of neo-liberalism, it’s truly astounding ability to persuade otherwise intelligent people that these economic slights of hand actually had some economic merit, rather than being the cheap conjuring tricks of economic quacks and shysters, which was of course their true nature.

The result was entirely predictable (except of course a naive and compliant media and public hadn’t got a clue what was hitting them, Roger Douglas being well trained in the art of Chicago School economics and the “shock doctrine”, nor did he make any secret of this) being that the vast majority of people, getting a one-off financial asset of around $700, sold their shares to rapacious investment firms. I can well recall shopping in Pollen St in Thames at this time, and representatives of these financial leeches approaching us in the street, soliciting would be the word, offering to buy our shares at $12.00 per share, when the companies had been valued at $4.00 per share, so no wonder people sold their shares. It was a national scandal which New Zealanders took in their usual political position, one of complete prostration. I didn’t sell my shares, but a few years down the track the company that my shares represented was fully taken over by another company, and my shares were compulsorily sold on my behalf, and I had to apply to get my money from some place in Auckland, they couldn’t even be bothered to send me a cheque for this amount. I suspect there are still thousands of unclaimed accounts even now. So much for the “property owning democracy”.

And what for? Remember we had just about the cheapest electricity supply of any nation in the OECD, almost entirely paid for by our predecessors – there were no outstanding debts, the industry functioned well, there were no massive expenditures that needed private finance, why bother with private finance when the electricity industry was self-funding and governments can borrow money, if they need to, at lower rates than private companies. There was an efficient and low cost government department and management that ran the whole industry from the rain to plug, and who’s one CEO earned around $300,000. It doesn’t need labouring by me as to how favourably all this compares with the situation as now pertains.

And that is why it is so disappointing to me that the Greens are not much more vociferous about the folly of the electricity reforms; of all the destructive follies of the neo-liberal economic reforms, the electricity industry in New Zealand (and many other countries) is the prime and most accessible example, and no doubt will be used by future generations as teaching material in schools and universities, and they can laugh at our culpability and criminal naivety.

I hope this brings some enlightenment.

Best wishes,

M J Anderson, you make a very perceptive point. It will be, as you fear, harder for consumers to indicate their preference for renewable energy generation through the market. But the government and Gerry Brownlee know all this. Gerry Brownlee is an energy dinosaur, keen to dig up millions of tonnes of brown coal (lignite) for our power stations and is an apologist for global climate scepticism; he belongs to the last century, or possibly the century before that.

I think it is a shame that the Greens have not made it plain that the so-called market reforms of the electricity system have a been a disaster, as many predicted. As far as I’m concerned, this shuffling around of resources is not going to make one iota of difference, and indeed its bizarreness only goes to prove how ramshackle and idiotic the thinking is about this so-called market, and Jeanette is not making this point anything like strongly enough. A naive acceptance of neo-liberal economic dogma is bad enough in National and Labour, it certainly shouldn’t be part of the Green economic philosophy, and Jeanette’s wishful thinking about this matter is not appropriate, I would contend.

There is only one solution to this problem. Electricity is going to be the primary energy source for almost every facet of our lives including, before too long, transport. It is too important a strategic element of our economy to allow these shenanigans to continue. The present government owned companies, Meridian, Genesis etc need to be reincorporated into one government owned entity, including Transpower. This will leave two private companies in competition. The government should reduce power prices unilaterally so as to make the profitability of these companies less. When the share prices reach a more reasonable value, say $4.00 for Contact, the government should offer to buy them back, if their owners refuse, the government should continue to ensure low electricity prices until the price reduces further. I have no ethical qualms about this whatsoever, shareholders have done well in the present arrangement, with Contacts share price nearly quadrupling in just eight years, and we know, that along with a compliant and cynical Labour government, these companies have conspired to rort consumers out of over $4 billion. The Greens should not be kowtowing to this nonsense, and should make it plain that the market reform experiment as failed, as we knew it would, and we will look to other ways to produce renewable power resources and foster energy efficiency.

Of major concern with the ‘shake up’ of the electricity market is the transfer of assets between genesis and Meridian. In particular the fact that Meridian will apparently be recieving the Whirinaki power station, completely undermining the Meridian brand image of a renewable energy supplier.

This is absolutely appalling move, as it removes the consumer ability to send economic signals by showing market choice for renewable generation.