Today 350 Aotearoa, the New Zealand Council of Trade Union, and FIRST Union launched a groundbreaking report.
It reveals how the country’s largest energy companies have distributed billions in excess dividends to shareholders thereby preventing reinvestment in renewables and keeping power prices high.
This blog post is a quick summary of the report’s key messages. Interested to have a deeper dive into the report? Click here to read!
Everybody should have the right to clean, affordable electricity. For many in Aotearoa today, we know that’s not the case. Household power bills have increased by 42 percent in the last 14 years, while our renewable generation has sat stubbornly at 85% since the 1970s. This is the time for investing in renewable solutions to make electricity clean and affordable for all.
It’s therefore hard to swallow that, since 2014, the four big gentailers – Genesis, Mercury, Meridian, and Contact Energy – have deliberately underinvested in the renewable sector, distributing $8.7 billion in dividends to shareholders: a whopping $3.7 billion more than they earned in profits over this period.
There is a clear connection between high profits and high fossil fuel generation. For the gentailers, keeping coal and gas as part of our energy mix is a crucial part of their business strategy to keep profits high.
By paying out excess dividends to shareholders, the gentailers ensure that there is never sufficient investment capital to expand new renewable generation. Expensive fossil-fuel inputs set the price for cheap renewable energy, keeping profits high and shareholders – including the Government – happy.
Households, small businesses and the planet pay the price for this reckless profiteering. Our communities suffer from stronger floods, droughts, polluted air, blackouts and soaring energy bills. Low socio-economic communities are disproportionately affected.
But there is hope and a way forward. As a majority shareholder of Genesis, Mercury, and Meridian, the Government remains the largest player in the electricity sector. The report includes five recommendations on how our political leaders can take concrete steps to establish a fair electricity system that ensures a stable climate and affordable electricity prices, particularly for low-income households.
As a majority stakeholder, the Government can:
- Setting a minimum profit reinvestment target at the next shareholder meetings to rapidly develop new renewable generation
- Require that future dividends received from its shareholdings be used to buy back gentailer shares, to be held by a special purpose vehicle with the objective of maintaining stable and secure energy supply;
- That fossil fuel- generation facilities be ringfenced for strictly non-commercial use to ensure national electricity security;
- That the Govt invests at least the equivalent of its $1.35billion excess dividend since partial-privatisation in community and household electricity schemes; and
- That a windfall tax be levied against the gentailers for the remainder of the excess dividend.
This is where you come in. We can pressure the Government by expressing our outrage, spreading the word, speaking up against injustice, and advocating for renewable and affordable electricity for all.
Together we can use this “Generating Scarcity” report to tell our leaders that we are done with profits over people and call on them to enact meaningful change.
➡️Click here to take a 2-minute, 5-minute, or 10-minute action!
🔁Share this blog post and ask your friends and whānau to take action with you.
⤵️Download the full report
What next? As we approach the national election next year, our campaign for homegrown energy is ramping and we need your help! Find out more about our Homegrown Energy Campaign and join the fight for a fossil-free world.