Brownlee Gerry: Questions for Oral Answer — Questions to Ministers 
Brownlee Gerry: Questions for Oral Answer — Questions to Ministers 
[Volume:606;Page:3993] 
12.  
GERRY BROWNLEE (NZ National—Ilam) 
 to the  
Minister of Energy 
: Does he agree with Heather Staley Chief Executive Officer of the Energy Efficiency and Conservation Authority that direct use of gas reticulated to households is “three times more efficient than burning it to produce electricity”; if so why? 
Hon PETE HODGSON (Minister of Energy) 
: 
 Yes. The direct use of gas can be close to 100 percent efficient while gas-fired electricity generation is more like 35 or 40 percent efficient. The net effect is that the direct use of gas for residential water heating for example is about 2.5 or 3 times more energy efficient than using electricity from gas-fired power stations to power a standard domestic hot-water cylinder. 
Gerry Brownlee 
: Given that gas burned in households is more efficient than gas used to produce electricity does the Minister approve of the move by the State-owned enterprise Genesis Energy to institute a fixed charge on gas use which will mean for some household customers increases of up to 60 percent in their gas bills and does he believe that encourages efficient use of energy? 
Hon PETE HODGSON 
: In order to deal with that and many other aspects of an emerging competitive gas market some months ago—I am sorry that I cannot remember the exact date—I set up a process involving a Government policy statement and an industry grouping in order to address various issues that might arise in order that we might see a competitive gas market arise of the kind that we have seen arise in the electricity sector. I am meeting the gas industry tomorrow to get an idea of forthcoming progress. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. We have been over and over all day the issue of Ministers not answering questions. You are telling us as you should that they should address questions. The Minister made no attempt to answer the question. 
Mr SPEAKER 
: Please be seated. I listened to the Minister’s answer very carefully. I thought that he most certainly did address the question on this particular occasion. The member had better not question my ruling on this occasion or he will be leaving. 
Gerry Brownlee 
: Have you ruled? 
Mr SPEAKER 
: Yes I have. 
Gerry Brownlee 
: You ruled that he answered the question? 
Mr SPEAKER 
: No I did not. I ruled that he addressed the question and that is what I am required to do. 
Gerry Brownlee 
: I have another question for you. I turn to the Standing Orders and see that there is a requirement on Ministers to address the question. Four criteria are laid down in the Standing Orders by which Ministers should answer. I asked him whether a 60 percent increase in the cost of gas for householders encouraged energy efficiency and he told the House that he was talking to gas people about a competitive market. That is not addressing the question at all. 
Mr SPEAKER 
: No I thought the Minister said that he had asked for a report which was coming out either next week or something like that on this particular issue. That addresses the question. 
David Parker 
: Should domestic gas consumers be concerned about the rundown of the Maui gasfield? 
Hon PETE HODGSON 
: No they most certainly should not. Domestic consumption of gas is such a small proportion of total gas use—under 5 percent—that there is no threat to domestic supply. It is the most valuable use of the gas. Any increase in the wholesale price of gas arising from the decline of Maui is likely to have only a modest effect on domestic prices as most of the domestic gas bill comprises transmission and distribution costs rather than fuel costs. 
Jeanette Fitzsimons 
: Will the Minister commit to taking some action to limit the size of fixed charges for gas connections which are the single biggest disincentive to households using gas just as he took some action over fixed electricity charges? 
Hon PETE HODGSON 
: As I said in answer to a supplementary question from the member who asked the primary question that and many other issues have been whacked into a Government policy statement and a gas market formation process which we have just kicked off. My first progress meeting on it is tomorrow. But if the member would care to consult my history on those matters she would find we are pretty keen to make sure fixed charges of any sort do not get out of hand. 
Gordon Copeland 
: Should New Zealand be fortunate enough to discover another large Maui-sized gasfield would Government policy be to develop it based on gas conversion into say compressed natural gas or methanol in preference to using it to generate electricity? 
Hon PETE HODGSON 
: Whilst it is unlikely that another Maui-sized gasfield will be found—big gasfields are quite hard to miss—it is possible. If we were ever in that position we would need to be very careful indeed that the extraordinary errors of “think big” were not repeated. 
Gerry Brownlee 
: Why would a household facing a 60 percent increase in its gas bill continue to be connected to gas when it would be cheaper for it to go to electricity even though it is more expensive to produce that electricity? Why do we have the Energy Efficiency and Conservation Authority which is funded by the Government to encourage efficient energy use when we have a State-owned enterprise that comes up with a pricing structure that basically says to users that they should use as much gas as they like as their costs will go down accordingly and was he consulted about that? 
Mr SPEAKER 
: That is two questions so far. 
Hon PETE HODGSON 
: Of course I am not consulted by State-owned enterprises before they put up prices. It is a market. However what the member may like to reflect on is whether Genesis Energy gas prices in this that or the other area compare well or badly with the prices of other suppliers of gas. If he would like to make a careful study of his shadow portfolio he would find that although Genesis Energy has put up its gas price it is still competitive. If it were not people would disconnect. 
Gerry Brownlee 
: I seek leave to table a Genesis Energy gas bill showing a 60 percent increase in the cost of household gas which will lead to the disconnection that the Minister worries about. 
Document by leave laid on the Table of the House.