Auchinvole Chris: Electricity Industry Reform Amendment Bill — Second Reading In Committee Third Reading 
Text is incorporated into the Bound Volume 
Auchinvole Chris: Electricity Industry Reform Amendment Bill — Second Reading In Committee Third Reading 
[Sitting date: 02 September 2008. Volume:649;Page:18556. Text is incorporated into the Bound Volume.] 
CHRIS AUCHINVOLE (National) 
: 
 I listened with interest to the previous speaker Peter Brown as I always do. I remember that I followed him in the first reading debate on this bill. I am not quite sure what it is about this Electricity Industry Reform Amendment Bill but here we are debating it in urgency. I noticed from checking back on the first reading speeches that that debate seems to have been held in urgency as well. 
The reality is that there is a great need for urgency in electricity matters—a great need—and a very dilatory approach has been taken to ensuring that we have a secure supply of electricity in New Zealand. I would vary slightly from the view of the previous speaker that we have to have an abundant supply. It is a little bit difficult to convince electricity-generating companies that they should have capital at risk of being used. I think that what we need is a sufficient supply with appropriate back-up where required. 
Hon Dr Michael Cullen 
: Hear hear! Absolutely right. 
CHRIS AUCHINVOLE 
: “Thank you very much.” I say to Dr Cullen. I thought of that all by myself. But it does follow business logic. 
There are of course costs to deferral. If we look at the sad situation of the Dobson dam which was put off for 8 years before it was morphed into the Arnold River scheme we see that there was a huge loss of opportunity cost in that. But the reality is that even though the project now has its approvals and its permits it is not guaranteed because the company involved in building it still has to consider whether it is the most attractive option for it. 
It is a delicate situation but it has not been helped by the figures given to us by my colleague Lindsay Tisch who mentioned just how short the present Government has been in producing electricity generation over the nearly 9 years of its tenure. The Minister of Energy can wax as enthusiastic as he likes about all the activity that is planned for the future current compliant projects but even he has to acknowledge—and he does—that there was a considerable lag during the middle years of this Government’s tenure. Perhaps saying “middle years” is a little unkind because it signifies that there was a beginning and that there might be an end fairly shortly. But there was a pause and that pause has not been without consequence. 
If we look at the Tasman end of West Coast-Tasman we see that there are whole industries up there that drop shifts in the winter to help conserve power which restricts their usage. Consistently now every 4 years we seem to have this stricture on power. Apart from that one of the consequences is that new companies cannot really start up unless they can anticipate having a secure supply. That is where we think this bill will help and National is very happy to support it. 
The purpose of the bill is to better ensure that costs and prices in the electricity industry are subject to downward pressure that the benefits of inefficient electricity pricing flows through to all classes of consumer and that new investments and generation from renewable energy sources occur. 
Quite apart from the other areas this legislation will be of considerable benefit to West Coast-Tasman which has smaller lines companies such as Westpower and Buller Electricity in Buller. The mission statement of Westpower specifies what it does. It distributes electricity generates electricity and provides power systems electrical contracting asset management services and electrical engineering consultancy services. It actually has quite a humming business there. The ElectroNet part of its business has about 120 very skilled employees. Both Westpower and Buller Electricity exist for the community and are owned by the community but the present legislative and regulatory charges on companies the size of Buller Electricity and the larger Westpower company are considerable. 
This bill will allow small lines companies to become engaged in generation particularly hydro schemes as the bill specifies that hydro power is renewable. Without this legislation if Westpower wished to engage in building a hydro scheme it would have to seek a special exemption from the Commerce Commission. This costs a load of hooch and is prohibitive for a small enterprise even to consider. The bill allows companies to look at having hydro schemes for an increased security of supply and a reduction of supply costs. Let us remember when we look at electricity that there is a 20 to 30 percent peak time loss of electricity simply in its transmission. Where it comes up from Lake Coleridge and across Mount Horrible through into the West Coast at peak times we have a 20 to 30 percent heat loss in transmission. In North Canterbury Marlborough Tasman and the West Coast 73 percent of the power used is brought in from outside the area. So we are almost guaranteeing that we will always have high transmission loss. 
We need to grow the telephone book on the West Coast so we need development. Without power there will not be any development. We have 56 rivers we have heaps of creeks but we have limited reservoir capacity. New systems will probably depend on run-of-river operations taking full advantage of the renewable and ever-abundant rain resource that we enjoy so much down on the Coast. There are added advantages. Westpower as I mentioned earlier has a contract subsidiary company called ElectroNet. It employs 120 people with a very high calibre high level of skills. Building generation builds career paths in that sort of company. It is with pleasure that National supports this bill which will none the less still require the National Party’s revision of the Resource Management Act for this to be a truly useful initiative. 
Bill read a second time.