'Naive' Greens/ Labour plans could lead to rolling blackouts
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Rolling blackouts could be a consequence of opposition party plans for an electricity buying agency, a funds manager says.
Milford Asset Management portfolio manager Mark Warminger says in a blog the "naive" plan to save $700 million on the country's power bills does not account for full direct and indirect costs.
He says those costs might include:
- A $2.5 billion increase in debt servicing costs on New Zealand's $253 billion external debt.
A $450 million reduction in dividends to the government.
A 30%, or $4.5 billion, asset writedown for state-owned enterprises.
$1 billion of capital destruction of the listed power companies.
A reduction of $100 million of dividends a year to New Zealand shareholders.
Mr Warminger says highly-skilled jobs will be lost as power companies reduce capital expenditure and development.
"In the short term this will not be an issue while demand catches up with supply, but by the time supply and demand are in balance it will be too late to add additional capacity in a timely manner.
"Rolling blackouts, anyone?"