Labour's proposal to reduce annual household power bills by up to $330 has been labelled 'incoherent” and a 'competition killer” by Tauranga MP and Energy and Resources Minister Simon Bridges.

Yesterday Labour and the Green Party unveiled plans for a crown entity to bring down power prices, stimulate the economy and create 5000 jobs if elected next year.

Energy and Resources Minister Simon Bridges has slammed the Labour-Green Party initiative to produce a single Crown entity – NZ Power – and reduce power prices.

Labour leader David Shearer says New Zealand has seen a $770 a year rise in the average household power bill during the last 15 years and this rise is alarmingly faster than other countries.

The proposal would see a new independent Crown entity - NZ Power - acting as a single buyer of wholesale electricity with the power to set prices along with a wholesale pool for electricity where prices would vary regionally, reflecting transmission costs and line losses.

NZ Power will on-sell electricity to retailers on the basis of long term contracts with larger users able to contract directly with the company resulting in more than half a billion dollars transferred back into Kiwi households.

Labour says average household bills will be cut by between $230 and $330 per year, a reduction of about 10 per cent for residential users while commercial and industrial users will see a five to seven per cent reduction.

'Kiwis have been stung by high power prices for far too long. People are working hard but can't get ahead because of the rising cost of living. They're doing their bit and the Government should do its part too,” says David.

David believes the policy will have significant flow-on effects for the economy including creating 5000 jobs and increasing Gross Domestic Product by $450 million.

Minister Simon Bridges slammed the proposal saying it is incoherent and will kill competition in the electricity market putting to waste Government's recent hard work in reducing power increases.

'Under the previous Government, electricity prices increased by 72 per cent. It has taken the National-Government's reforms to arrest these ridiculously steep increases on New Zealand households.

'The 2010 electricity market restructure is working. The market now has more players and much more competition than it ever had under Labour.”

Households are increasingly taking advantage of greater competition and are switching companies for a better deal, in some cases saving up to several hundred dollars a year, says Simon.

Since the Electricity Authority's ‘What's My Number?' campaign, beginning in May 2011, there have been almost 700,000 consumer switches.

'These types of policies have been considered in the past and rejected for very good reasons. Consumers should be very afraid of them.

'They may look simple but all they will ultimately bring is higher costs to the households.”

In Parliament yesterday, Independent Tauranga MP Brendan Horan questioned Simon's comments asking if he is aware Government figures show household prices in the Bay of Plenty have soared at rate 15 per cent higher than the rest of the country.

Simon deflected suggestions saying he feels people in Tauranga are exceptionally satisfied with the political representation and quality electricity system they receive.