Hughes Darren: Electricity (Disconnection and Low Fixed Charges) Amendment Bill — Second Reading 
Hughes Darren: Electricity (Disconnection and Low Fixed Charges) Amendment Bill — Second Reading 
[Volume:646;Page:15113] 
Hon DARREN HUGHES (Deputy Leader of the House) 
 on behalf of the  
Minister of Energy 
: I move  
That the Electricity (Disconnection and Low Fixed Charges) Amendment Bill be now read a second time 
. This bill has two small parts. The first part amends the definition of a “low-use consumer” in the Electricity Act 1992 so that regulations can be made that will enable a greater number of low-use lower South Island customers to benefit from a low fixed-charge tariff option. 
The low fixed-charge regulations were introduced in 2004 to provide low-use consumers with a tariff option that is more equitable for low energy usage and compatible with the Government’s energy-efficiency objectives. At present these regulations require networks and retailers to make available a low fixed-charge tariff option to all domestic consumers whom they service and who have consumption at their primary dwelling of less than 8000 kilowatts per annum. However the 8000 kilowatts threshold has resulted in far fewer consumers in the lower South Island being on the low fixed-charge tariff than in other regions due to the fact that power tends to be used for heating in colder regions. 
This bill alters the definition of a “low fixed charge consumer” from a fixed threshold of 8000 kilowatts as currently defined in the Act to a definition to be provided in the regulations so that different regional locations and averages can be used. The Labour-led Government believes that this will be more equitable. 
The bill will also extend the Minister’s powers to grant exemptions from the application of the regulations to electricity distributors or retailers. This change is directed at small isolated networks that are not connected to the national grid where the cost of servicing consumers can be far higher than is normal for grid-connected networks. 
The second part of the bill responds to the recent concerns about the disconnection practices of electricity retailers particularly with regard to vulnerable consumers. It amends the Electricity Act so that regulations can be made if electricity companies do not follow the disconnection guidelines developed by the Electricity Commission. The Act does not currently contain sufficient powers to regulate disconnection processes or to regulate the full content of these guidelines. The bill consists of regulation-making powers. It does not alter any of the existing processes or requirements in the Act relating to the making of regulations. 
I would like to thank the Commerce Committee—on this occasion all the members of the Commerce Committee for their consideration of the bill—as well as persons who made submissions to that committee. The committee received and considered 11 written submissions and heard four oral submissions. The Commerce Committee was unanimous in its report back and the only amendment to the bill was a drafting change that was recommended by officials in order to simplify the bill. Apart from this amendment the bill will proceed in the same form as was initially introduced by my colleague the Hon David Parker. The fact that it is proceeding largely unchanged and received very few submissions shows that the bill has widespread support. 
Chris Auchinvole 
: Oh! 
Hon DARREN HUGHES 
: Well the member’s party is supporting it so I will give the member the charity of my silence. 
Once the bill is passed the Minister will finalise new regulations that will enable a greater number of lower South Island consumers to benefit from a low-fixed charge tariff option. The regulations will set the threshold for the lower South Island initially at 9000 kilowatts which is the average domestic consumption level for this region. 
Regarding disconnections this bill will enable regulations to be made that will protect vulnerable consumers for example by regulating arrangements regarding the process for disconnections following non-payment of accounts reconnection billing information and processes alternative payment options such as smooth payments redirection of income and debt recovery and also the process for identifying consumers who would be at risk if their electricity was disconnected. 
I hope that the disconnection-related powers conferred by this bill will never need to be used. I am confident that electricity retailers will continue to work positively as they have with the Electricity Commission to ensure that the disconnection guidelines are adhered to. However the regulation powers in the bill will act as an important backstop if the voluntary process that is available at the moment proves to be ineffective. On behalf of the Minister of Energy the Hon David Parker I commend this bill to the House for its second reading.