Dr Oliver Hartwich: Splitting power generators from their retail arms would not cut electricity bills

With energy prices spiking, an old idea has gathered fresh momentum: break up the big electricity companies. New Zealand First put the proposal on its agenda at the party’s State of the Nation address, calling for the four gentailers, companies that both generate and retail power, to be split apart.

When people are hurting, the urge to do something is understandable. But doing something is not the same as doing the right thing. I should disclose that several gentailers, and Chorus, are members of The New Zealand Initiative, which I run. But the case against splitting them depends on economics, not loyalty.