O'Connor Damien: Electricity Industry Bill — In Committee 
O'Connor Damien: Electricity Industry Bill — In Committee 
[Volume:667;Page:14143] 
Hon DAMIEN O’CONNOR (Labour) 
: 
 I confess to not having been on the Finance and Expenditure Committee but I think that anyone who picks up the Electricity Industry Bill which is quite a substantive one has to have an interest in it. The industry and electricity itself affect each and every New Zealander whether they be in industry a pensioner or someone who just wants the comfort of nice underfloor heating in their bach by the sea. Whatever it is it is really important to get this legislation right. 
Clause 9 of Part 2 lists the industry participants. Back in the good old days people understood that we had increases in electricity prices—there was no doubt about that—but there was security of supply and we had an integrated system. There was basically ECNZ and people had a local lines company that they dealt with. They knew what they paid and some of them had to guarantee the price because they had had a line extended to their place. We have now moved into the new era of user-pays and the market etc. and if people read through the list of industry participants they will start to get worried. For example industry service providers are industry participants and the layers of people who will be in this new electricity system—this wonderful new market that National is trying to create here—are listed in clause 9(2) as being: “(a) a market operation service provider: (b) a metering equipment provider: (ba) a metering equipment owner: (c) an ancillary service agent: (d) a person that operates an approved test house: (e) a load aggregator: (f) a trader in electricity:”. The list goes on and on. I guess all of those people will take a little slice in terms of costs or profit and ultimately the consumer will pay. The more complex we make a system—and this is exactly what is going on here—the more costly it will be. 
There is of course an industry code and clause 11(1) states that industry participants must register and comply with the code. We understand the need for a code for the building industry given that the National Government’s attempts to deregulate it back in the early 1990s led to leaky homes in this country. It did not have an adequate code because it thought that the market would deliver and the market failed to do so. I say to National members that this is another classic example of tinkering around with a failed model. 
Industry participants have to register and they have to comply with the code unless they are exempt from the obligation to register as set out in clause 12. Clause 12(1A) states: “The Authority may grant an individual exemption to an industry participant only if the Authority is satisfied that … (b) exempting the participant will reduce overall administration and compliance costs.” What a bizarre statement that is. I hope that the Minister in the chair can answer our concerns about that because exempting anyone from any code would reduce compliance costs. If that is a qualification for a person to seek an exemption then will everyone be exempt? Most people would probably say the authority would have its costs reduced which is what I think the intent is here. But I thought we had a user-pays regime here: if we had a code and people were obliged to commit to it then they would keep to the costs of doing that and in that way make sure that the costs were kept low. 
This is complex legislation. It is a band-aid to try to patch up a failed structure in electricity in this country and most New Zealanders understand that. It does not matter where we go and it does not matter whom we speak to because most people understand that the electricity structure in this country needs major reform. We have acknowledged that. We have to make some major changes and tinkering as Minister Brownlee has done here in my view will just lead to a more complex more costly and more ineffective way of governing electricity supply generation and efficiency. The one goal that we should all focus on is making better use of energy and electricity in this country. I do not think that this bill will help in that direction at all and it would be great to hear an explanation of the reason for that.