Tisch Lindsay: Electricity (Disconnection and Low Fixed Charges) Amendment Bill — Third Reading 
Tisch Lindsay: Electricity (Disconnection and Low Fixed Charges) Amendment Bill — Third Reading 
[Volume:646;Page:15605] 
LINDSAY TISCH (National—Piako) 
: 
 As previous speakers from National have indicated we will be supporting the Electricity (Disconnection and Low Fixed Charges) Amendment Bill. Although most speakers have focused on the tragedy that happened earlier on I will direct my comments to the low fixed charges which are addressed in clause 4 of this bill. It is interesting that this bill does not have any parts; it only has five clauses and clause 4 “Low fixed charge tariff option for domestic consumers” is one that most people other than Richard Worth have not spoken on. Most speakers have concentrated on clause 5 “Electricity governance regulations”. 
Back in 2002 the Government proposed that low-use domestic electricity consumers be offered a low fixed-charge tariff option with the objective to “Ensure that electricity retailers offer a low fixed charge tariff option or options for the delivered electricity to domestic consumers at their principal place of residence that will assist low-use consumers and encourage energy conservation.” So that was the genesis of what the changes in 2002 were designed to do. We found that there was to be a regulator. This was put in the hands of the Electricity Commission which was given the responsibility to monitor compliance with the regulations that were promulgated at that time. So the question has to be asked: if we already have a regulator in place what is the need for this particular bill? 
As I said earlier the bill covers two parts—although it does not have parts it covers two major issues—and this would indicate to us that the Electricity Commission has not been able to achieve what was set out in that deliberation back in 2002. If we were to look at some of the flaws that are there—which the bill does not address but I think are significant and need to be highlighted—we would see that the low fixed-charge tariff is calculated so that the consumer’s electricity cost versus the standard option is neutral at the average of 8000 kilowatts consumption level. The 8000 kilowatts are mentioned in the introductory comments to the bill. Consumers who are using less than 8000 are being subsidised by those consumers who are using more than 8000 kilowatts. Therefore the lower the consumption below the average the greater the subsidy. Many low users who use a lot fewer than 8000 kilowatts on average are not contributing towards even the electricity cost of overheads including network charges let alone providing a margin to the retailer or the distributor. 
Of course the regulations do not take into account the users of dual fuels—gas and electricity. Those domestic consumers using gas for hot-water heating and space heating will reduce their electricity consumption by about one-half compared with those using electric power. Those domestic consumers who by good fortune have gas appliances installed in their homes or can afford to have gas appliances installed will be able to receive the assistance simply because they are dual-fuel users. That is also the case for consumers who use another alternative fuel such as solar heating or coal—as is common on the West Coast and in Otago. 
Although National supports the bill there are certainly areas that needed to be thought through more than they have been. Someone who may live in a $2 million home and may spend 6 to 9 months overseas would well qualify for the low-user charge yet could afford to pay the higher price but because of the low consumption will benefit from those changes. The bill does gives some flexibility and I think that is significant. In relation to the low fixed-charge tariff I note that the commentary on the bill states: “As a result of the amendment the definition of ‘low-use consumer’ would be provided in regulations so that different regions might have different thresholds rather than a nationwide threshold of 8000kWh per annum.” Those are the points I wish to make. I am happy that National supports the bill and I look forward to its passing.