Privatisation - Cons

Cons

1 Power prices may rise During these tough economic times, people don't have as much money to spend on such assets, which would mean the overseas investors more likely will be able to have shares other than NZ's. Foreign ownership of energy companies - higher power prices, dividends flowing overseas, and fewer jobs.

Power prices have already risen dramatically since the old Electricity Corporation was broken up in the 1990s and partially sold to Contact Energy.

An official review in 2009 found that residential power prices rose in real terms by about 80 per cent in the decade to 2007, while the cost of new power stations rose by only about 20 per cent. It concluded that the market was not fully competitive.

The law was changed last year to increase competition by measures such as transferring Lake Tekapo's two power stations from Meridian to Genesis, cutting Meridian's national hydro share from 70 per cent to 50 per cent.

But energy lobbyist Molly Melhuish says Contact and TrustPower have raised their retail charges (excluding line charges) consistently faster than the three state companies. By her estimates, TrustPower and Contact almost trebled the domestic energy component of their charges in the 12 years to last November, while the state firms raised their comparable charges by "only" between 90 per cent and 130 per cent.

Mr Miller says he would be surprised if past ministers didn't "pick up the phone" to the state enterprises whenever hydro lake shortages threatened power price spikes.

"It will be harder for the Government to control the sector - in the past they have had the ability to just make the phone call," he says.

"There is a risk of higher prices then [in crises] when there is a scarce commodity. Shareholders want to price-maximise, consumers want fair behaviour, so there is a conflict at that point, but it's not unsolveable with good regulation."

2 Greenhouse gas emissions may increase (keeping NZ green)

An energy expert who wants to be anonymous says the state companies have been far keener on reducing carbon emissions than a private company would have been.

"Meridian made decisions about renewable energy that were absolutely in lockstep with Government policy with their investment in wind," he says.

"Others were building wind, such as TrustPower, but they were more clinical and commercial about it - so much so that Contact has never built a wind farm yet, and if it stacked up commercially they would have."

Greenpeace climate campaigner Simon Boxer says overseas governments that have sold off energy companies abandoned greenhouse gas emission targets whenever they threatened the companies' interests.

He says the Key government