Parker David: Electricity (Disconnection and Low Fixed Charges) Amendment Bill — In Committee 
Parker David: Electricity (Disconnection and Low Fixed Charges) Amendment Bill — In Committee 
[Volume:646;Page:15535] 
Hon DAVID PARKER (Minister of Energy) 
: 
 Mr Auchinvole has said two things recently that I think need to be corrected. The first is the suggestion that we are not building enough additional generation capacity. New Zealand’s need for additional generation capacity increases by around 150 to 170 megawatts per annum. Last year a capacity of more than 500 megawatts was built which is substantially more than 1 year’s growth in capacity. 
Phil Heatley 
: How much wind was that? 
Hon DAVID PARKER 
: There was not much wind power in that and the effect of wind load factors is taken into account in that 150 to 175 megawatt range. This year we are building over 300 megawatts of capacity. 
Chris Auchinvole 
: Was this to catch up from previous years? 
Hon DAVID PARKER 
: Some of it was to catch up on previous years; that is correct. Of course the member’s party I believe is supportive of the market in the electricity sector—and if he wants to take a call to say that National is no longer in support of an electricity market he may. The effect of the market is that one lets the market determine when it is necessary to build more capacity rather than building it before it is necessary. But maybe the National Party is changing its policy on that like it has on so many other things recently. 
The second point I would make is that it is true that electricity prices have gone up. The main reason they have gone up is that gas prices have gone up. Gas prices have not gone up as much as petrol and diesel prices but they have gone up substantially and they have gone up substantially as a consequence of the Maui gasfields running out and of our other gasfields being more expensive essentially. That has been the main determinant of the increases in gas prices. 
In terms of some of the things that have been said in respect of this bill by National members one would think that they were going to oppose this bill and my understanding from their votes earlier is that they have voted for it. They have indicated they are likely to vote for this legislation because they think it is necessary. 
Clause 4 deals with low fixed-charge tariffs for domestic consumers. I have never oversold the benefits that the low fixed-charge tariff gives to low-use consumers. It gives them a benefit but it is not an enormous benefit for most of the people who qualify. None the less the benefit that does arise ought to be fair throughout the country and at the moment it is not because the entitlement relies upon a threshold that is currently the same for Auckland as it is for Invercargill. Plainly if people live in Auckland which is a warmer city than Invercargill then they do not have to use as much electricity to heat their houses. Accordingly a lower quantity of electricity on average is used in Auckland and more people qualify for the low fixed-charge option in Auckland proportionately than do in Invercargill notwithstanding the fact that if anything the need is greater in Invercargill. That is why we are fixing this—it is plainly unfair. 
The low fixed-charge option eligibility should be based upon regional use patterns rather than on one New Zealand - wide average. This change to the Act changes the regulation-making power under the Act to enable that anomaly to be fixed.