Yesterday Energy Minister Gerry Brownlee announced his response to the review of the electricity sector which reported back in June.

Yes, the review which told us that we had been rorted to the tune of $4 billion in excess power charges by electricity companies since 1998. This was the review that confirmed all of our worst suspicions - that the power companies HAVE been out to get us! Thanks to Max Bradford's market driven electricity reforms of the late 1990s (largely left unaltered by Labour) we were found to have been shivering through a decade of Winters when we really didn't need to.

Now, the new 'centrist' National Government is about to apply more market driven reforms within the electricity sector. This time, as before, they are being sold to consumers as being the panacea for high prices.

But are they really?

Of course, we will eventually be able to switch power companies more easily. Ideally under the market driven model favoured by the government and Treasury boffins, this should encourage greater price competition within the marketplace. Haven't we heard this all before, though? Under the Bradford reforms, a whole lot of new electricity retailers entered the marketplace so as to provide competition and choice for consumers. Theoretically, by now, we should all have been better off through enjoying lower power prices. The reality is, however, we haven't seen any reduction in our power bills as, year after year, they have continuously gone up and by more than the rate of inflation.

This is because of one of the great inherent contradictions of modern capitalism - while having more players in the marketplace might ensure greater choice, the need to generate a profit is still the main imperative that drives business decision making. Hence, in order to make profits, prices have to be raised above the rate of inflation in order to keep generating returns to either public (government) or private shareholders. Therefore, while competition may exist on a comparative basis between firms, all generators have had to raise prices at the same time as one another.  This has wiped out any gains that the consumer might have made otherwise. Furthermore, as most power companies source their electricity through hydro generation, there has (until the recent advent of wind and solar generation) largely been one source of power in this country - water. And power companies have milked that monopoly resource for all its worth.

What Gerry Brownlee has put forward is a plan for more of the same. More of the same market behaviour in terms of price and profit seeking. More of the same in terms of consumers being rorted year after year. More of the same in terms of individuals and families having to choose whether to put a heater or an extra layer of clothing on during the winter.

This is the case as the changes proposed by Brownlee don't address the core issue - that of the free market being allowed to run riot within an essential service sector. I don't see how shifting power stations between owners, the creation of a new Electricity Authority (to replace the already toothless Electricity Commission), permitting lines companies to enter the retail business and forcing companies to pay out consumers during dry years will make any difference.

What is really needed is full on state control and ownership of the electricity industry. All publicly owned power companies should be required to hold and then reduce power charges for ordinary householders. Privately owned companies (such as Contact Energy) should be re-nationalised. A ten year national electricity strategy should be drawn up. In my view, any strategy should seek to hold down prices for householders while, at the same time, encouraging the ecologically sustainable development of hydro, wind, solar and wave generation sources. A National Electricity Department should be established with the power to implement any such strategy. The department would also oversee industry regulation and have the power to set maximum prices for both householders and industry. Fully elected local power authorities should be re-established too. These local authorities would have responsibilities similar to those exercised by the old power boards and metropolitan electricity departments. Therefore, these boards would own local transmission lines and provide retail services to the general public.

What I would argue for (and as the Alliance Party has long advocated for) is the complete dismantling of the Bradford reforms and the return of electricity to being a public service operation. This is the only way that prices can be held down so that people don't freeze. Some people might argue that we do need a profitable electricity sector in order to be able to afford capital upgrades and improvements. Sure, there is some rationale behind that but if we return to the notion of surplus/deficit instead, there will be some years when surpluses do occur and some years when deficits are run. We should get used to the fact that, like the economy, electricity use can be cyclical but under the free market model, this isn't often reflected in pricing. For example, when hydro lakes had to spill excess water this spring, the excess supply should have meant lower prices. Instead, electricity companies didn't pass this on and continued to charge their exorbitant rates.

So much then for the free market!

Underlying it all, any surpluses generated by the state energy agencies should be used to both subsidise household prices and upgrade generating capacity from alternative sources like wind and solar. Only then can we all be winners rather than just being subjected to more of the same.

That's why I would encourage people to give Gerry Brownlee's latest reforms the flick!