Major electricity providers are directing billions of dollars in excess profits to their shareholders in a move that has some concerned about the impact on both consumers and the climate.
A report out this morning from First Union, the Council of Trade Unions and 350 Aotearoa has revealed that the four big “gentailers” (electricity generator-retailers) have paid out $3.7 billion more in dividends to their shareholders than they have earned in profits. That’s an average excess dividend of $459 million a year.
“Excess dividend distribution has starved our electricity network of the investment needed to build new generating capacity, hiking prices on households in the midst of a cost of living crisis, and keeping coal and gas-powered generating assets on life support,” said First Union researcher and policy analyst Edward Miller.
“As the largest gentailer shareholder, we’re calling on government to propose resolutions at shareholder meetings that will channel profits into building new renewable generating capacity, and using any dividends to buy back the gentailer shares.”
That’s a position shared by the Green Party, who have also called for a “fix” to the electricity market. Julie Anne Genter, the party’s energy and resources spokesperson, said the current state of play disadvantages both consumers and the climate – and things need to change.
“Massive electricity profits should be reinvested into renewables, action to reduce household bills, and local clean energy projects, such as shared or community energy,” said Genter.
There was also a jibe aimed at National, which under John Key partially privatised the electricity market. “Burning fossil fuels and keeping bills higher than necessary has become a strategy for profiteering that Mr. Luxon seems eager to promote,” said Genter.