Seymour David: Electricity Transparency Bill — First ReadingText is incorporated into the Bound VolumeSeymour David: Electricity Transparency Bill — First Reading[Sitting date: 02 December 2015. Volume:710;Page:8524. Text is incorporated into the Bound Volume.]DAVID SEYMOUR (Leader—ACT): I rise on behalf of the ACT Party in opposition to this bill. Aristotle once said that a speaker should have logos ethos and pathos and that member was a speaker who actually managed to fail at all three. But I do want to commend the member who brought the bill because I think it is actually important that we continuously attempt to improve the functioning of our electricity market and I believe that the member sincerely wants to do that.So I wanted to come to the House and make a speech to explain why I am opposing that attempt. I think the member’s argument breaks down to the fact that there is a suboptimal amount of information about electricity costs or at least the contributors to electricity cost structures appearing on the bills that we receive when we pay our electricity bills. So the logic continues that if there was more information the market would somehow become better.I think we have to ask first of all what is the market failure? What is preventing electricity companies from doing what the member’s bill would require them to do? Quite obviously nothing because so far three speakers in favour of the bill have pointed out that there are electricity companies already doing precisely what the bill would require them to do. Then you might ask perhaps are those companies somehow outliers that are swimming against the tide of the incentives that the market gives them? Is there some sort of conspiracy going on and is it the case that perhaps there is a systemic incentive not to provide more information?Again it is really not clear why in a highly competitive market any of the incumbents would not want to compete on providing more information. Perhaps the reason they have not done that as David Bennett alluded to is that information and the processing of it is actually costly. Information is something you should give up real resources in order to attract and it is just not that appealing to have a more complex bill.A great irony was that Gareth Hughes pointed out just how complex it would be given the number of different permutations of generators retailers and distributors that there are in one transmission company across New Zealand. So perhaps it is the case that this bill would actually add enormous costs across the sector that so far given the choice retailers have decided is not worth competing on. But if you were to ask a little further along the chain of events what would happen if consumers were to be provided with this information—if we assume that prescribing by legislation is not going to stifle innovation in the way information gets passed through the market. If you assume that—and that is a big assumption—how would consumers respond to having this information? Presumably they would be more likely to switch their electricity company based on having some information about some particular sector of the system that was not serving them very well under their current retailer.It is an open question whether that would actually be a positive occurrence because one of the things that I find difficult to defend as part of our market-based electricity system which is otherwise very good is the dead-weight cost of people constantly switching retailer as new information comes to pass. It is with some irony that Gareth Hughes argued that he wanted more information and more switching in a market characterised by those two features that he does not support. Perhaps they would switch more but perhaps they would also decide to take political remedies to perceived difficulties with the market: that one particular sector needed to be better or worse regulated.Again it is not clear that we are going to get an efficient outcome by having political lynch mobs going about trying to attack a particular part of the electricity system. As you can see it is easy to have good intentions in electricity markets but the further you go the more complex it becomes. So I have to oppose this bill simply because while the intentions are good once you account for the unintended consequences and the real cost of information in a market this bill will leave electricity consumers the same at best and worse off if we are not lucky at all.