NZ energy market

Radio NZ acting as the loyal organ of the National government

Energy company shares fall on Labour's power plans

Share prices of listed energy providers Contact Energy and Trustpower have continued to plunge in the wake of plans announced by Opposition parties to overhaul the electricity system.

Radio NZ,

19 April, 2013

The Labour and Green parties say they would set up a Crown entity called New Zealand Power that would buy electricity from generators at a set price and then pass the savings on to consumers.

Business lobby groups have labelled the plan as economic vandalism and ludicrous, though energy analysts say the single buyer model is common in countries like America.

At midday on Friday Contact Energy shares were down 23 cents (4%) to $5.23 a share. Trustpower shares had fallen 44 cents (6%) to $7.12.

Energy network company Vector is a regulated business and its chief executive Simon Mackenzie says the Labour-Green plan should not be dismissed out of hand.

Mr Mackenzie says Labour is looking to simplify regulation around lines business and his company welcomes that.

He says the proposal is something that should be debated because there are advantages and disadvantages with all models.