Hughes Gareth: Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill — First ReadingText is incorporated into the Bound VolumeHughes Gareth: Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill — First Reading[Sitting date: 14 October 2015. Volume:709;Page:7274. Text is incorporated into the Bound Volume.]GARETH HUGHES (Green): I move That the Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill be now read a first time. I nominate the Commerce Committee to consider the bill. My bill deals with breaking down the barriers for all small-scale clean energy but in New Zealand this mostly means solar. So I would like to start at the beginning where it was once said there was light. About 150000000 kilometres away in the sun’s core hydrogen atoms are fused into helium through nuclear fusion and sunlight or photons of energy find themselves after 10000 to 170000 years and possibly billions of collisions within the sun finally escaping reaching the surface and travelling into space. Those photons then travel at the speed of light and over the course of the 8.3 minutes they take to get to earth if they hit a solar photovoltaic panel on someone’s roof they are turned into free clean energy. My bill is about how we deal with that electricity and the rules around it.Up and down the country and across many countries I have met with various people who have gone solar and are excited by the ability to produce their own power from the sun. The International Energy Agency and even our own Treasury acknowledges that solar power has a big role to play in a low-carbon clean-energy future. Up and down New Zealand I have met dozens of Kiwis who have gone solar. They tell me that they have gone solar because they love the freedom and the sense of energy independence it brings. What they have seen is as power bills reach record highs and solar power’s costs reach record lows that the costs have dropped some 99 percent across the course of my lifetime. Those people have looked up at their roofs and they have wondered.As individual consumers they do not want to be totally dependent on the big old power companies and just passively pay the power bill which seems to keep going up. They want to be able to do it for themselves. They want to be able to participate but the unfair market rules in New Zealand mean that for many Kiwis the solar dream has become a headache. I have met with farmers business people school principals and marae representatives—all people who have invested their own money in solar—but I would like to talk about a couple whom I met in Auckland. Roly and Gail Runciman are superannuitants in Howick in Auckland and they went solar. They told me that they went solar in their retirement age; they wanted to spend their life-savings to try to fix their power bills as they were on a fixed income.Last year Roly grabbed a ladder took me up on his roof and proudly showed me his solar panels. What we discussed up there was how it was that the power companies had all the power in the relationship—that they could set the buy-back rate for his surplus energy which they then sold on at full retail price. We talked about how the power companies had recently slashed their buy-back rate by 72 percent at short notice. Roly told me: “It’s stacked against someone who wants to do something a little bit entrepreneurial as well as doing something for the country.”Now along with that there is additional ridiculous red tape when it comes to solar. Across the country there are 29 different regional forms fees and rules. Some lines companies take months to deal with an application. One solar company told me that when it quotes for solar panels for a customer of the 60 days it takes them to put a solar panel on someone’s roof only 1 day is spent actually installing the panel the rest is dealing with paperwork. Some cities require a resource consent some do not. Some have fees some do not. In some places like Cambridge you can pay up to $850 to connect to the grid yet only an hour-and-a-half drive up the road in Auckland it costs zero.I do not think it is on for power companies to have all the power and for the little guy to have none except the power to switch to another retailer which treats them exactly the same. So that is why I drafted this bill—to give those Kiwis a fair go. My solution is a simple common-sense amendment to the Electricity Act to empower the Electricity Authority to act as an independent umpire. The Electricity Authority would be empowered to deliver on three tasks: the first is setting a fair and reasonable non-subsidised buy-back rate; secondly establishing standardised contracts to provide certainty for all participants; and thirdly for reducing that ridiculous regional red tape with a standardised connection framework. The big issue was the buy-back rate and currently the buy-back rate is entirely decided by the electricity retailer which you could argue has a commercial imperative to see a solar customer as a competitor or a threat to its profits.So if surplus solar energy is produced on someone’s roof those electrons automatically flow back through the grid and essentially are used by the neighbour or someone down the road. That neighbour or someone else down the road is charged at the full retail rate—an average of 26c per kilowatt-hour across the country—yet the power company unilaterally decides what to give them and it can change this with only 30 days’ notice. Currently this is as low as between 4c and 8c. It is entirely out of step with other countries and it is incredibly unfair.I do not think it should be politicians setting the rate but I definitely do not think it should be the power companies—the ones with all the power—setting the rate. That is why I support having an independent umpire. So I believe the answer is for the Electricity Authority to develop an understandable transparent and clear formula that is fair and reasonable. I do not believe this is about setting up households to compete with power companies; it is definitely not about trying to make fortunes via public subsidies for people going solar. It is simply about fairness and certainty.So my bill is trying to help those consumers—the schools the businesses the maraes—but I also believe it is helping the power companies because the power industry finds itself at a crossroads in 2015. For 100 years it has grown fat by selling more power—that has been its business model. It has pushed power down wires in one direction and thought about it like water-pipe engineers—trying to get all those electrons from point A to point B. But disruptive technology like solar like batteries and like electric vehicles is asking them to think more like computer engineers. It is as different now as sending mail by the post is to people sending emails over the internet.So my bill asks those power bosses a fundamental question: will you fight solar or will you work with it? Because currently it looks like the power companies are scared of solar and they are actively trying to discourage those Kiwis trying to do it themselves. So if we continue those rules that give all the power to the electricity companies we are simply going to force people to go off-grid with battery technology leaving fewer people on the grid raising prices causing more people to leave the grid—in other words the utility death spiral which is being discussed so often overseas.Over the last adjournment I was over in Silicon Valley and I met with Tesla Motors to discuss their new lithium ion Powerwall battery. I also met with Enphase Energy which is doing great research and development work in Christchurch and has teamed up now with Genesis Energy to offer battery storage solutions for Kiwis here. The price of batteries is halving every 8 years akin to Moore’s Law and what we are seeing is the ability to harness storage technology to deliver cheaper cleaner smarter electricity for everyone on the grid. So the choice is: are we going to work with solar and battery technology or are we just going to force them off and see batteries as their ticket to go off grid? My vision is 100 percent clean energy a modern smart grid with customers in control with customers having power—but this is going to require those electricity companies to think differently about their role. They have to think as energy service companies and care about their customers’ needs and what the customers want and not just try to sell more power down the wires to drive their profits.So I am urging power companies to support my bill for a clear fair and transparent regime for solar homes or they may well just see their customers leave them. Ultimately though my bill is a vote on fairness. It is a vote for certainty and I am asking MPs today in this Chamber: are they going to be standing with those individual Kiwis like Roly and Gail—Kiwis in Tauranga Palmerston North Ōhāriu—or are they going to be standing with the big old-fashioned power companies? We can set fair and reasonable rules for distributed generation we can allow consumers to participate in the electricity market we can see a more modern resilient grid and we can grow more good local jobs.I am hoping that members can support this bill. We can shine a little light on it—excuse the pun—and if we get a hearing in a select committee we can hear from solar customers solar companies and the electricity industry because there is a real issue. My bill I believe is a good way to deal with it but let us have that discussion in the select committee. I believe it deserves a little bit of sunlight. Kia ora.