The Labour-Green plan to reform the electricity market aims to address rising prices, the fact that low-cost generators get paid the same for electricity as high-cost producers and the large profits hydro dam owners make from a public resource - water.
Labour finance spokesman David Parker says the electricity market lacks sufficient competition and is failing to keep a lid on prices.
One of the key features of what Labour and the Greens are proposing is that NZ Power, the agency they would set up as a single buyer of wholesale power, would pay generators a price which better reflected the cost of production.
At present all generators whose power is used in any given period are paid the same price as the most expensive power used to meet demand during that period.
That means power generated relatively cheaply at a hydro dam will often fetch the same price as power generated using expensive gas as fuel.