Smith Nick: Urgent Debates — Power Outage—Upper North Island 
Smith Nick: Urgent Debates — Power Outage—Upper North Island 
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Hon Dr NICK SMITH (National—Nelson) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. The scale and the cost of yesterday’s power failure was enormous. Over 700000 people—25000 businesses 380 schools 300 sets of traffic lights eight hospitals and rest homes and two universities—were affected. Critical hospital operations were cancelled dozens of people were trapped in lifts for hours and hundreds of thousands of people were grossly inconvenienced. The tragedy is that it did not need to happen. The direct losses will top over $70 million. The damage to Auckland’s confidence and respect will be far more. 
This is Third World stuff and it is a disgrace for this Government. It is just not credible for the Prime Minister to blame the weather as she did this morning. This was not a major storm event in Auckland. The winds were high but they were not extreme. Not a single roof in Auckland was lost yet our power infrastructure was so poor that it was brought to a halt. It simply is not acceptable. 
The technical explanation for the blackout is that a single overhead earth wire broke. It fell on to Transpower’s 110-kilovolt switching equipment bringing the whole system down. No doubt there will be technical questions to resolve over why the wire failed whether the wire was properly maintained and whether the design was appropriate. But the real question that we must get to the bottom of is why Auckland’s power was so fragile that the failure of a single wire was sufficient to bring the economic capital of New Zealand to its knees. And that is a political question for which this Government must be held accountable. On taking up the role the Minister of Energy said: “I do recognise it is my responsibility to ensure that the lights don’t go out in New Zealand.” 
Hon Member 
: What did he say? 
Hon Dr NICK SMITH 
: He said that it was his responsibility to ensure the lights do not go out in New Zealand. Well I say to Mr Parker that they did and he has failed. The tragedy in all this is that Labour has to take responsibility for the situation because it has been warned so often. 
Engineers have repeatedly said that our creaking electricity infrastructure is just not up to the grade. Last year—over 16 months ago—Dr Keith Turner who has a PhD in electricity transmission and happens to be the chief executive of New Zealand’s largest electricity company stated: “New Zealand’s electricity grid is so overworked that some lines cannot be taken out of action for servicing.” That situation is just unheard of in the Western World. At the Commerce Committee National asked Dr Turner what lines he was referring to and he said quite specifically they were the lines at Otahuhu that service Auckland. What did the Government do about it? It did absolutely nothing. But that is not all that was said.  
On  
Campbell Live 
 Dr Turner said: “We are running just too close to the wind in this country particularly on transmission.” We could not have had more prophetic words. And what was Minister Parker’s response to those concerns from Keith Turner? He said: “The problem is not as bad as the member and others believe.” Well I ask the Minister how bad is it when 700000 people lose their power? Then we had warnings in the briefings to the incoming Government from Treasury and the Ministry of Economic Development. Both specifically mentioned concerns about transmission. We had the Commerce Committee report from last year which stated that lines could not be serviced because transmission was right at the limits of capacity and again Auckland was specifically mentioned. So we have a paper trail from State-owned enterprises from select committees and from independent commentators all warning the Government that it had a problem—and it did nothing.  
Today we should also scrutinise what the Minister’s response has been in the last few hours. On TV3 Mr Parker said that the Otahuhu to Pakuranga and Penrose upgrade was not only under consideration but was also approved. Well was it approved? No it was not. That Minister misled. The very specific words he used last night were: “That line has been approved.” It was not. There is no budget for it. There is not even a Resource Management Act application for it. 
 The Minister went on to say—as reported in the  
New Zealand Herald 
 this morning—that he had asked Transpower to investigate separating out parts of the Otahuhu station under its plan to upgrade transmission into Auckland after 2013. Are the people of Auckland prepared to wait around until 2013 to fix this problem? Let me make it very plain that National does not believe that we can wait until 2013 to fix this problem. As Keith Turner said last year National wants “all black” to refer to who takes the Rugby World Cup not the state of the city of Auckland. Nor is it sufficient for the Minister to try to explain himself by saying that the Government is committing tens of millions of dollars to upgrade the transmission system. The reality is that the Government has taken over $2 billion in profits from electricity companies and has spent less than one-tenth of that sum on new investment. 
Yesterday’s power failure also exposes the failure of the Government’s whole energy policy. Pete Hodgson should be in the House today. In 2001 he said—with all the bells whistles and spin—that we needed his flash new National Energy Efficiency and Conservation Strategy. The Government said it was better to spend money on reducing electricity demand than on transmission or new generation. It spent $100 million on that energy efficiency strategy. Do members know how much has been achieved—how much has been saved? Well in the March review this year the Government showed that the “improved” energy efficiency since it brought in the energy efficiency strategy and spent the $100 million was worse than energy efficiency was when we did not have a strategy. The Government was banking on a 20 percent improvement in energy efficiency so it did not bother spending money on new generation or new transmission which is why we are so deeply in a pickle today. The reason is that the Government’s whole energy policy approach has been a failure. 
Let us go through it and see how badly Labour’s energy policy has delivered. Over the last 6 years we have seen a 40 percent increase in the average price of power. At the same time— 
Hon Annette King 
: So deregulation works does it? 
Hon Dr NICK SMITH 
: Annette King chips in. I tell her that when the Government introduced its energy reforms in 2002 it said the policy had three aims. The first was keeping the price of electricity as low as possible. The price has since gone up by 40 percent. The second objective was to use more renewable energy. The Government has failed on that front because the amount of renewable energy we are using has actually been in decline. The Government’s third aim in relation to its electricity reforms was to improve the security of supply. It has not done that—as 700000 people in Auckland found out yesterday. And today the Prime Minister said that this issue is not damaging New Zealand’s investment reputation. That is garbage! Dick Hubbard was absolutely correct to say that the power cut was “very very damaging”. 
The key question is what National would do to get our electricity system right. National says that the very first thing to do is to invest in our infrastructure. We should be investing in roads and investing properly in electricity. 
The second key thing we say is to reform the Resource Management Act. The Government puts its head in the sand and pretends that the Act will enable us to build the infrastructure our country so desperately needs. It will not. Transpower has said—in 2002 2003 2004 and 2005—that it cannot maintain and upgrade the grid without reform of the Resource Management Act. I say to David Parker and the Prime Minister who have refused to reform the Resource Management Act that they are signing New Zealand up to more blackouts like the one we had yesterday. 
The third issue we need to address is the confusing and failed electricity policies Labour introduced in 2002. What sort of nonsense do we have when transmission decisions are made not only by Transpower but also by the Electricity Commission and the Commerce Commission? Everybody knows that those reforms are a failure. We need a clarification of the roles of those agencies. National says we need a single agency to be responsible for ensuring that the transmission system can keep the lights on. 
The last point I will make is that I believe and National believes as Don Brash suggested last year that it is time we had a ministry of infrastructure. The Government has so neglected the infrastructure of New Zealand that—I never thought I would say it—Auckland’s electricity system is as bad as its roads and that is a disgrace. Labour got rid of the Ministry of Works and the Ministry of Energy. National’s view is that we need a ministry of infrastructure to make sure that we properly plan and provide for infrastructure. 
I say again that what occurred in Auckland yesterday was a national disgrace. It was a disgrace for this country to have 700000 people without power. It was a disgrace that we lost $70 million worth of economic activity. Responsibility for that disgrace rests fairly and squarely with the Government. It has neglected our infrastructure neglected the legislation ignored Transpower and ignored multiple warnings that the system was on the blink. It relied on a vague warm fuzzy energy efficiency strategy that did not work. The people of New Zealand and particularly Auckland are paying for that. 
I say to the Minister that he must accept responsibility for his mess. Last night on TV the Minister made an analogy with the state of Queensland. In the state of Queensland the power cut involved only 250000 people and the relevant Minister resigned. If this Minister wants to follow the example of Queensland he should tender his resignation because he Trevor Mallard and Pete Hodgson have failed to listen to the proper warnings and have let New Zealand down. It is a disgrace. This country deserves better. Sadly it will not get that until we have a change of Government.