O'Connor Damien: Electricity Industry Bill — In Committee 
O'Connor Damien: Electricity Industry Bill — In Committee 
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Hon DAMIEN O’CONNOR (Labour) 
: 
 My colleague Chris Hipkins raised some very important issues— 
Hon Shane Jones 
: As always! 
Hon DAMIEN O’CONNOR 
: —as always about some of the technical issues in relation to smart meters and the tools that will be available or not available and used or not used in the future. We hope that they will be used. 
I want to focus on the issue of structure. The Electricity Authority will be a key player in whatever may happen in the future. Mr Gilmore said earlier that this will mean there will be better control on prices in the future. I would like to go back and refer to a submission made to the Finance and Expenditure Committee. I was not at the committee but Contact Energy—a major player—confirmed in its evidence that it will need to continue to raise its retail prices by up to 5 percent per annum if it is to continue to invest profitably in new generation capacity. That is what it said. Five percent per annum is scary for New Zealanders on a fixed income who face a cold winter. So where do they go? 
The major players might say if we pick up on that issue that they could make reasonable profits and do not have to make huge profits so maybe they do not have to go to 5 percent. But this National Government has said to each and every State-owned enterprise that it must lift the level of return on its investments. What does that mean? It means that the State-owned enterprises have been instructed to make more profit for return to the consolidated account. So any kind of vain hope that we will see moderate levels of profits is just that—a hope. Contact Energy itself said at the select committee that it would probably raise prices by up to 5 percent. I hope that does not occur. 
I will move back to the authority— 
Hon Shane Jones 
: We have to go forward; we never go back. 
Hon DAMIEN O’CONNOR 
: My colleague says we should never go back and that is right but the National Government does need to look at the mistakes it made in the late 1990s and learn from those mistakes so that it can go forward and improve matters in the future. When National was in Opposition it railed against the Electricity Commission. National members opposed it in every speech in this Chamber on every piece of legislation. They said it was unnecessary interference but now we have an authority. What is the key difference between the commission and the authority? I looked at the objective set out in clause 17 in Part 2 and I saw it states: “The objective of the Authority is to promote competition in reliable supply by and the efficient operation of the electricity industry for the long-term benefit of consumers.” Those fairly laudable honourable and useful objectives are not too different from those of the Electricity Commission. 
Of course the previous Labour Government attempted to control the market and we did a fair job of bringing in some necessary regulation. But we did not do what we had hoped to do and I do not think that the authority will do it here. If we go back to the independence of the members of the authority the previous speaker Chris Hipkins said we would not have a guaranteed consumer advocate here. That is true. Reference was made in terms of membership to someone who might raise consumer issues but the bill clearly states that no one on that authority will be able to act on behalf of any particular organisation or industry group. That means that New Zealanders on a fixed income be they members of Grey Power or beneficiaries will not be able to have a champion on the authority because the legislation prevents that. 
What we have seen in the past through the market is that the big players have been able to negotiate lower rates for electricity so their increases have been moderate. But the little players the average New Zealanders the people who do not have a lot of muscle or leverage other than through fair representation in this House through the Labour Party will not have a say. The price increases for those people as quoted by Mr Gilmore and the Minister time and time again have been very high. We do not want to see a repeat of that whereby the industry players effectively ratchet up the cost to the small players because they do not have the ability to do anything about that. This authority will not give them any better representation or ability to reduce the price increases.