Key insists on power company profits

The Government will keep requiring state-owned power companies to return profits, ignoring Labour's suggestion this leads to the "price gouging" of consumers.

Prime Minister John Key said Labour had taken $3.1 billion in dividends while in government, and leader Phil Goff's idea was a case of "do one thing in opposition and a different thing in government".

Mr Goff used his speech to the Labour conference to attack the power companies' profits, saying the party was wrong not to fix the system while in government.

He said power companies should not be geared to make a profit as it was in effect a tax which fell on those least able to pay it. Mr Goff cited Mighty River Power, which this month returned $230 million to the Government, saying if a company could feed back profits like that, then New Zealanders' power bills were too high.

Mr Key said Labour's plan to reduce the profit requirement would challenge the structure of state owned enterprises to act as commercial ventures.

He said National's solution was to hold the power companies' "feet to the fire" and demand better performance to get the same dividends without price increases.

Mr Key said power had gone up 67 per cent during Labour's nine years in Government. In National's term so far it had gone up 1.93 per cent.