O'Connor Damien: Electricity Industry Bill — In Committee 
O'Connor Damien: Electricity Industry Bill — In Committee 
[Volume:667;Page:14135] 
Hon DAMIEN O’CONNOR (Labour) 
: 
 Absolutely Mr Chairman. I refer to clause 4 “Purpose” which states: “The purpose of this Act is to provide a framework for the regulation of the electricity industry.” The Minister in the chair the Minister of Energy and Resources gave a well-meaning but useless speech in the Chamber and I have to say he has done it before. I recall that Minister making such a speech or a similar one anyway with good intent back in the 1990s. The question I ask of him is where “Mad Max” is. 
Dr Rajen Prasad 
: Who? 
Hon DAMIEN O’CONNOR 
: Max Bradford started this whole thing. This is about managing Max’s mad markets quite frankly. Max Bradford said that the markets with very little regulation would deliver long-term secure and cheaper electricity for this country. I can remember the Hon Nick Smith stating in the newspaper in Nelson that he would bet a bottle of wine with me that prices in electricity would come down. I am still waiting for the wine. 
The reality is that the Government has at least acknowledged that it needs regulation to improve the situation. The previous Labour Government tried but we failed I have to say. We did not do what was necessary because we were trying to put Humpty-Dumpty back together again. The integrated electricity system that we had in this country was disintegrated by Max Bradford on the basis that the market and competition would deliver more efficiency more security and cheaper electricity into the future. It may have been the same officials then who are here now—I am sorry; I do not want to unfairly bring the officials into it—but we have to realise that we have a disintegrated market which has failed time and time again. 
The basic problem is that if one is a generator and no further investment in generation occurs then demand as it continues to increase will simply drive up what one gets for one’s existing generation. It makes good business sense. So why then does one invest in new generation until one reaches a point at which there seems to be a bit of market reaction? People start to get agitated or the Government gets agitated about the price they are paying for electricity. 
We accept that electricity prices went up too much under Labour because we were trying to tinker with a failed market model and now the National Government is trying to do the same thing. That is why Labour does not support this bill. Labour does not support this bill for a whole lot of reasons and we have a whole lot of speakers here who will go through those. 
The purpose of the bill is to regulate the electricity market. It is a huge step forward for the National Government from Max Bradford and it is a huge step forward for the Hon Gerry Brownlee who was a member of the Government that deregulated the electricity industry in this country. It has failed to deliver security of supply. That deregulation has failed to deliver efficiency gains which we see from time to time. It has failed to deliver affordable electricity to many many New Zealanders. There are elderly people in their homes today who refuse to turn on their heater. They are freezing in their homes because they are scared of what they have to pay for electricity. That is a failure. It is a failure of our system which should be integrated and should have moved further down the renewables path. 
We are lucky that we have a big chunk of electricity generation from renewables but of course Mr Brownlee is absolutely committed to digging up more coal from the national parks although he has backtracked on that for a moment and to using thermal generation to drive electricity generation forward even further. Well rather than celebrating the switch from coal to gas I ask whether we should not be going further into renewables such as more geothermal—which he mentioned—more wind and more hydro. I suggest there are many many ways that we can progress without using gas which should be used for far more productive uses in this economy. 
To go back to the bill—because Mr Chair I accept your guidance—the Minister referred to Dunedin. One swallow does not a summer make. Dunedin has always been held up as the fine example of what competition can deliver to consumers. Well not many other consumers around the country have had the benefits of any true competition. 
Hon Gerry Brownlee 
: Yes there are. 
Hon DAMIEN O’CONNOR 
: No there are not I say to Mr Brownlee and he knows that.