Copeland Gordon: Questions for Oral Answer — Questions to Ministers 
Copeland Gordon: Questions for Oral Answer — Questions to Ministers 
[Volume:607;Page:4323] 
1. GORDON COPELAND (United Future) 
 to the  
Minister of Energy 
: Does he stand by his statement made last April that Max Bradford’s 1998 electricity reforms were “irreversible or mostly irreversible” and does he believe the market model is the best way forward for the electricity industry? 
Hon PETE HODGSON (Minister of Energy) 
: 
 Yes I do. The irreversible part of the Bradford reforms included the forced sale of community-owned generation assets. That was an unconscionable exercise in coercion. The reversible bits were reversed in legislation passed in 2001. As to the market model the Government is actively exploring whether some form of intervention to improve security of supply should be taken though as with other infrastructure issues this country faces that will take longer than a year or two to address. 
Gordon Copeland 
: What then does the Minister make of the Prime Minister’s statement yesterday with regard to the electricity industry when she said: “We are contemplating significant change” and what changes are being considered? 
Hon PETE HODGSON 
: The Prime Minister the Minister of Finance myself and many other Ministers in the Government are saying that we are open to a variety of options. There are interventions around in other parts of the world and we are looking at those to see whether they have any use in the New Zealand situation. 
Mark Peck 
: What is the Minister’s chief concern with the operation of that market? 
Hon PETE HODGSON 
: The design of the market is supposed to ensure that new generation is built neither too soon nor too late. It has become clear that incentives for building enough dry-year reserve generation in a timely fashion might not be strong enough. 
Gerry Brownlee 
: Has the Minister seen the statement made by Steve Barrett the chief executive of Contact Energy that: “To blame the current market structures for lack of new fuel resources or a dry summer is to shoot the messenger.”; if so why is the Government proposing policy to interfere in the market in the future rather than encouraging savings now to avoid the looming crisis and dealing with the Resource Management Act so that Contact Energy could go ahead with the three proposals it has on the books right now? 
Hon PETE HODGSON 
: No I have not but I have seen a press release from the member who asked the question in which he says that Contact Energy’s price increase in Wellington of 6 percent was being blamed by the company on a narrowing gap between generating capacity and demand and a response a few hours later from the company itself which said: “No it isn’t.” 
Gerry Brownlee 
: I raise a point of order Mr Speaker. You are going to rule against me but I will take the opportunity to point out that the Minister was asked at the end of that question— 
Mr SPEAKER 
: The member will not have the opportunity to point that out. He knows I will rule against him. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. If a Minister is asked to comment on a statement made by a person outside this House and chooses to do so should he not restrict his answer to the statement in question? 
Mr SPEAKER 
: No. The Minister is responsible for his own answer. I am not. All I have to do is see that he addressed the question. He did. 
Gerry Brownlee 
: He’s a dodgy Minister. 
Mr SPEAKER 
: The member will now stand withdraw and apologise for that comment. 
Gerry Brownlee 
: I withdraw and apologise. 
Rt Hon Winston Peters 
: How does it feel to have lost the confidence of the Prime Minister who is now bringing in Dr Cullen in an endeavour to unravel a situation borne of his inertia—in an attempt to stop the blackouts from coming this winter? 
Hon PETE HODGSON 
: I happen to be a member of Dr Cullen’s infrastructure group and that group is looking at a range of infrastructure issues including roading. A decade of amiable disregard by that Government during the 1990s has left this country short on infrastructure across many industries. 
Hon Ken Shirley 
: Does his Government support the State-owned generator Meridian Energy Ltd investing $600 million in Australian generation while the New Zealand market is squeezed by lack of generation capacity and will he concede that the Government’s dominance in the market through State-owned enterprises is preventing the full realisation of the electricity reforms? 
Hon PETE HODGSON 
: I am not an ownership Minister for the company but I am sure the ownership Ministers would have required Meridian Energy Ltd to ensure that any investment offshore would not deleteriously affect investment in New Zealand. I make the point that was made by the chief executive in yesterday’s paper which is that wind turbines happen to be cheaper by the dozen. 
Jeanette Fitzsimons 
: Can the Minister confirm that the low prices delivered up until now by a market system which cannot foresee dry years or gas depletion have driven electricity demand growth to 5 percent a year—considerably faster than the growth of the economy; and how does he propose that the national energy efficiency and conservation strategy should deal with that demand growth? 
Hon PETE HODGSON 
: That is a very good question. The indications are that the substantial increase in demand this year has been driven at least in part by drought itself—that is to say drought on the East Coast of New Zealand. The increase in demand between 2002 and 2001 by contrast was much less; in fact it approximated to zero. 
Gordon Copeland 
: Will the Government take specific steps to encourage energy conservation in an attempt to avert power cuts this winter and give generators a clear message that the hydro shortage situation should not be used to gouge excessive profits from New Zealand commercial and domestic customers? 
Hon PETE HODGSON 
: I have met with the industry on a number of occasions and its members and I are of one view which is that conservation will need to be considered and start soon though not necessarily a full-on conservation campaign; and what is more that it is in the interests of the industry to manage that because it has a lot of ability to do so.