Consumers in cold despite $50m profit

9:41 am on 28 August 2014

A consumer advocate says power prices should be slashed, after one of New Zealand's largest power companies posted an annual profit of $49.15 million.

Genesis Energy's result is the latest in a series of profit announcements from the major power companies and is refocusing attention on how much money people are paying for electricity.

The Domestic Energy Users Network consultant, Molly Melhuish, says it is hard to hear that Genesis made tens of millions of dollars in the year to June.

Mrs Melhuish said high prices are causing problems for some consumers who cannot afford to use enough heating to stay warm this winter.

"It really does make me mad - the whole market model is causing a great deal of pain. This winter, even more people are using less electricity than they need.

Genesis says it cannot reduce prices because they are set to recover lines charges, operating costs and levies and make a modest profit margin.

Asset sales to blame - Labour

The Labour Party says the result shows the company's partial sale by the Government is already hurting consumers.

Energy spokesperson David Shearer says the fact the profit is well above the forecast at the time Genesis was partially listed on the stock market last year shows that the sale was misguided.

"It's absolutely wrong. This is a direct result of the fact that we have sold these power companies off - and now these power companies are pushing up these profits for the benefit of a small number of investors at the expense of New Zealanders."

But National Energy Spokesperson Simon Bridges said the system was working, with prices for the year to date rising at 2.3 percent - their lowest rate since 2001.

Mr Bridges said the National Party believed competition was the best way to bring prices down.

The best thing consumers could do to get the cheapest power prices was to shop around, he said.

Genesis Energy shares climbed 5.5 cents to $1.81 by the close of trade on Wednesday.