I have a lot of time for our politicians. They work very hard for relatively little money. The two times I’ve looked at becoming one, I’ve been put off by the fact that they work 6 1/2 days a week, struggle to get anything done, and have half the country instantly hate them. They deserve our respect, not our envy or hatred.

That being said, it frustrates me that our politicians have become victims of short-termism and tribalism. There is too little long-term planning, and very little agreement across parties. Those with the biggest chequebook in town are still responsible for the decisions they make, and this includes 100% responsibility for our high power prices.

Why are politicians to blame?

Because they retain 51% public ownership - and 100% control - of our three biggest power companies - Mercury, Genesis and Meridian. Since they were listed on the stock exchange, no subsequent Government, blue or red-led, has allowed the gentailers to raise the money required to meaningfully expand the supply of power. And this has meant higher power prices. It’s a simple supply and demand thing.

So how did we get here? Think about the incentives.

For Governments to keep their majority holding in the gentailers, they would have had to provide taxpayer dollars to fund the building of new power stations. That would mean diverting taxpayer dollars from other priorities.

So, the gentailers, knowing Governments wouldn’t allow them to build new power stations, put their prices up. This is called rent seeking by economists, and it’s - unfortunately - a rational response if you have something increasingly rare that people have to buy.

For directors of the gentailers, lack of Government money for expansion has been their get out of jail free card. It allowed them to build less, raise prices, feel good about their increasing profits and share prices, and pump up dividends. They have been doing what they are paid to do - look after shareholders.

Successive Crown Ministers have become addicted to the juicy gentailer dividends. Treasury estimates them to have been a combined $5.4 billion since listing. Quid quo pro. Successive Governments have - cunningly - left any political fallout from higher power prices to be their successors’ problem.

There is a horrible irony in all this. Politicians, with 51% ownership and 100% control of the gentailers, get to blame their management and directors for our high power prices, but as the majority owners of the gentailers, it’s actually their fault. It’s like your manager making a mistake, but publicly shaming you.

There is only one loser in all this: everyone who pays their power bill. With the gentailers having the politicians’ approval to focus on profits and not new supply, we all suffer from higher power prices.

This Faustian pact has made industries uncompetitive. It is simply bonkers that our aluminium and steel plants have to throttle back production so we can switch on our heaters in winter.

To be fair, this status quo has been good for shareholders, including those KiwiSaver funds that own the 49% of gentailer shares listed on our stock exchange. But increased power prices have been way higher for the average family than any benefit to their KiwiSaver fund, and as a nation, we are certainly net losers.

However, some credit is due too. This Government has agreed to chip in their 51% of a $400 million expansion by Genesis into renewable energy. But it’s too little, too late, and in these hard times, I doubt they will have the appetite to fund much more.

It didn’t have to be this way. Let’s imagine the alternatives to 51% Government ownership.

The first is what I’ll call 'the good old days' - 100% Government ownership of our power companies. Power prices would then clearly be the Government’s fault, so they would have spent what’s required to keep them low. This is why all our big hydro dams and geothermal plants were built, i.e., the Governments of the day made sure abundant and cheap power was a priority, and the Ministry of Works got on with building the dams and geothermal stations.

The other alternative was 100% private ownership. If prices rose, power companies would smell the opportunity and build more supply, with shareholders funding it. The ability for new entrants to easily enter the market would prevent unnecessary price gouging. The market would be like that for cars, plenty of competitors to keep everyone honest.

But neither of those scenarios exists. Instead, we have a horrible middle ground. 51% ownership by the Government - with 100% control - yet starving them of the capital to increase power supplies. Yet, if you were to believe the politicians, high power prices were the greedy gentailers’ fault. Rubbish.

So what’s the solution?
Nationalising the gentailers is simply not affordable, because the Government would have to pay $13 billion for the 49% of the shares that KiwiSaver funds and the public owns, and that would be just the start. The Government would then need to find the money to build new power plants.

But an alternative is very possible - allowing New Zealanders - and only New Zealanders - to own more of the Government’s share of the gentailers. That would allow them to raise the capital they need to build more renewable power. It would also tap into the hundreds of billions that KiwiSaver managers will have to invest in the future.

Under this scenario, proper competition would mean gentailers would invest much more in new supply. Their rent-seeking days would be over, and the government would still have a vital role, as both an arms-length regulator and owner of Transpower. They could even retain 20% of each gentailer as a blocking stake, just in case one of them wants to do something silly in the future. Let’s not forget that the Government would get a windfall from the sale of its shares. Even selling 30% of the gentailers - and keeping the remaining 20% - would mean another $8 billion to spend. That’s four Dunedin Hospitals.

Retaining the status quo - where the Government has 51% ownership - and 100% control - simply hasn’t worked. Too few benefit, too many suffer.

Make no mistake, high power prices are 100% the fault of our successive governments, blue and red. They’ve been starving our power companies of the food they require - capital - while also milking them for dividends. Ask any dairy farmer how that works out.

So, don’t let them point fingers. Politicians, of all colours, have caused - and perpetuated - this mess. Only they can fix it. Insist they do.