New paper from New Zealand Council of Trade Unions/Te Kauae Kaimahi on public energy ownership (with research support from CICTAR)

CICTAR Researcher Ed Miller has contributed to a new paper from the New Zealand Council of Trade Unions calling for a return to public ownership of the electricity system. The paper explains how the partial privatization of the system has led to a lack of investment in infrastructure and rising costs to citizens. Meanwhile shareholders benefit from huge dividends.

‘The partial privatisation of our electricity system has prevented growth in our generation capacity. A state of manufactured scarcity has delivered rising energy bills for households and businesses and huge dividends to gentailer shareholders.

Treating the electricity market as a source of profit has led to us this point. Shareholders have been operating rationally, seeking to maximise their returns. The government is one of the chief beneficiaries of this dynamic as it holds a 51% stake in three of the big four gentailers.

Assuming that more market solutions will deliver better outcomes in New Zealand is to believe that these same actors will behave irrationally. The challenge is that electricity provision is a public utility, not a freely tradable good.’