'Moral hazard risks' of helping firms hit by high energy costs

Winstone Pulp International closed its two mills in the Ruapehu District, citing high energy costs as a contributing factor. (Image: NZME)

Oliver Lewis

Fri, 04 Oct 2024

The closure of industrial firms affected by high energy costs will have regionally significant unemployment impacts and affect the profitability of the forestry and wood-processing sector, officials warned the Government.However, in advice provided to Regional Development Minister Shane Jones on Aug 26, they noted there would be risks if the Government stepped in to prop up firms that hadn’t secured future electricity contracts, which are meant to mitigate against price volatility.“Supporting unhedged and under-hedged firms could be...

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