Hipkins Chris: Electricity Industry Bill — In Committee 
Hipkins Chris: Electricity Industry Bill — In Committee 
[Volume:667;Page:14146] 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 There was far too much material in that speech from Aaron Gilmore on the Electricity Industry Bill; I do not think I will be able to get through all of it. I was interested to hear Aaron Gilmore describe himself as a major player in the electricity industry. I think the State-owned enterprises regard themselves as major players in the electricity industry; I am not sure that anybody would ever have regarded Mr Gilmore as a major player in the electricity industry. I know of course that in his little world he invented electricity and we congratulate him on that! We are most grateful to the people of Christchurch for delivering him to this House so we can all benefit from the huge knowledge he brings! 
I will talk about a few of the things that Aaron Gilmore spoke about before I talk about the Electricity Authority. Mr Gilmore talked about new generation getting stuck in the Resource Management Act. I wonder whether he could give us an example of an electricity generation project that has been stopped by the Resource Management Act. 
Aaron Gilmore 
: I can give you many. 
CHRIS HIPKINS 
: There are none. He cannot come up with a single one. I have plenty of time. I ask the member to name one—any one will do. 
Aaron Gilmore 
: I can give you many. 
CHRIS HIPKINS 
: Come on then. Name one. Aaron Gilmore says the Resource Management Act is responsible for bogging down all the electricity generation but he cannot name a single project that was delayed by the Resource Management Act. 
Let us be clear about what the Resource Management Act does when it comes to electricity generation. It means that if a generator wants to dam a river or build a wind farm in someone’s backyard the people who will be affected get a chance to have a say. Aaron Gilmore thinks that is a bad idea; I do not. I happen to think that if there is to be a major infrastructural development that will impact on rivers on people’s backyards or on the environment New Zealanders should have a chance to have a say on that. It is a disappointment that the National Government and people like Aaron Gilmore do not seem to think that is the case. 
Aaron Gilmore talked about a lower price rise path. Is that not a major turn-round from National’s pre-election rhetoric about lowering power prices for New Zealanders? At meet the candidates meetings up and down the country National candidates gave people the impression that if they elected a National Government that was ambitious for New Zealand somehow the power prices would come down. They are not talking about that any more now that they are on the Treasury benches and are driving around in their BMWs. Nowadays they are talking about a lower power price path. 
Aaron Gilmore claims of course that power prices have not increased as much under the National Government. There are two reasons for that—two big reasons. The first is that it has rained quite a lot. When the hydro lakes are full the power price does not go up as much. If there is lots of water hydroelectricity is actually quite cheap. National is claiming credit for the rain. These days Gerry Brownlee tries to claim responsibility for an awful lot of things but I do not think he can claim credit for the rain. 
The second reason is that the Maui gas issue has largely been addressed. The Maui gas price was kept artificially low by a long-term contract entered into many decades ago. 
Aaron Gilmore 
: Before you were born. 
CHRIS HIPKINS 
: I am almost certain it was before I was born. That artificial restriction on the price of gas has now come off. As the field diminished the restrictions came off. New gas is coming online and that is a good thing but the new gas is more expensive than Maui gas. That has been one of the biggest contributors to the increase in electricity prices over the past decade. That issue had largely been dealt with and the flow-on effect had largely come in by the time National took office. National members cannot claim credit for the fact that that issue was all dealt with under the previous Labour Government. 
I come back to the Electricity Authority and to some of the mechanics of the authority. Then I will talk about the code and in particular some of the issues that could be addressed. The first thing I want to talk about is the make-up of the Electricity Authority. One thing I am concerned about is that the way the authority has been established and will function means that consumers particularly domestic consumers do not get a look-in anywhere. Nowhere in the make-up of the Electricity Authority—or in its functions really—will the views of domestic consumers be sought. They will not have an avenue to complain or to go back to the authority when they think the electricity market is behaving unfairly. That is one thing we think is wrong. 
The domestic consumers are the ones who are being done over. Let us look at the power price path. There have been massive increases for domestic consumers in the last decade or so but the price for commercial and industrial users has not gone up by as much. Domestic consumers have been done over with power price increases but for commercial and industrial users the price increases have been nowhere near as much. The Electricity Authority will not be able to do anything about that. 
There are some ironies in this bill as well. Gerry Brownlee came to the Chamber and told us that the bill is all about increasing competition. One of the things this bill does is entrench Transpower’s role as the system operator. Currently Transpower is the system operator on contract with the Electricity Commission but the Electricity Commission could change the system operator if it chose to do so. This bill effectively entrenches Transpower as a monopoly as the system operator. In a bill that is supposed to increase competition the Government is entrenching the monopoly Transpower has as the system operator. 
Hon David Parker 
: What sort of incentive is that to reduce costs? 
CHRIS HIPKINS 
: That is a very very good point made by my colleague David Parker. There will now be no oversight by a Government body of Transpower in its role as the system operator. There will not be the drive for efficiencies that there could have been. The Electricity Commission will not be leaning on the market operator to make sure that there are increases in efficiency. That is another problem I have with the bill. 
I will talk now particularly about the industry participation code. The relevant clause that deals with the industry participation code is clause 35. It talks about what the code may contain. Clause 35(1) states: “The Code may contain any provisions that … are necessary or desirable to promote any or all of the following: (a) competition in the electricity industry: (b) the reliable supply of electricity to consumers: (c) the efficient operation of the electricity industry: (d) the performance by the Authority of its functions: (e) any other matter …” etc. 
One of the things that submitters argued was that the Electricity Authority—the Electricity Commission as it is now; the Government effectively—should be taking a much more proactive position when it comes to smart meters. The Government has dragged its heels on this issue. I think that everybody at home will be asking why they should have any confidence that the Government will use this code to deliver a better deal for consumers when there is a really obvious issue that it could pick up right now and deal with— 
Hon David Parker 
: The Parliamentary Commissioner for the Environment has reported on it. 
CHRIS HIPKINS 
: The Parliamentary Commissioner for the Environment has already given the Government the report telling it how it could be done and the Government is ignoring it. The Government could pick up the issue of smart meters and immediately deliver something of real benefit to consumers. Instead it is turning its back on it. Gerry Brownlee is ignoring that issue altogether. 
As a result electricity companies up and down the country are installing dumb smart meters that do not have the technology that they could have if a standard was in place. Also they are installing smart meters that are unique to individual suppliers and that is a major problem. At my house which I moved into a year ago the meter was installed by Genesis but I have my power with Meridian Energy. Meridian Energy cannot access the technology in the smart meter that is in my house. It still sends somebody to my house once every 2 months to do a manual power reading because the technology being installed is not universal. There is no universal standard. If Gerry Brownlee wants to promote the ability of consumers to switch power companies and reduce costs clearly that is something he could do straight away. It would mean that if I decided that Genesis Meridian Energy or whoever I was with was not the best company for me I could switch to another company. It could still tap into the smart meter technology that I had and it would not need to send someone around to my house to read the meter manually every 2 months. 
That is a bugbear as well. My electricity usage changes from month to month as it does for many New Zealand households. The estimate reading is never anywhere close to what I have used. It is either wildly over or wildly under the electricity I have used. New Zealanders up and down the country face that problem when they have estimate readings every second month. All of that can be done away with if a smart metering system is put in place and properly regulated. But instead the Government is not doing anything about it so the electricity companies are installing dumb smart meters where the system behind them is proprietary to the company that installed the meter which will dampen down competition. 
What faith should New Zealanders have that the electricity industry participation code that will be legislated for in this bill will be effective when the Government has already turned its back on a major issue on which it could have delivered some real benefit to New Zealanders? 
Hon Shane Jones 
: Copped out. 
CHRIS HIPKINS 
: It has chosen to cop out on that and not follow up on it. Smart meters are the way of the future. The Government could do that now.