Sowry Roger: Questions for Oral Answer — Questions to Ministers 
Sowry Roger: Questions for Oral Answer — Questions to Ministers 
[Volume:617;Page:13136] 
6.  
Hon ROGER SOWRY (National) 
 to the  
Minister of Energy 
: Does he believe the infrastructure audit carried out by PricewaterhouseCoopers accurately states the issues facing the electricity sector in New Zealand at present; if not why not? 
Hon PETE HODGSON (Minister of Energy) 
: 
 No I do not but it did accurately state the issues facing the sector when it was written. 
Hon Roger Sowry 
: Why has the Government not moved to clarify the situation with regard to carbon taxes given the findings of the infrastructure audit report which states: “Their failure to do so has resulted in electricity generators holding back decisions on new generation.”? 
Hon PETE HODGSON 
: The uncertainty over the future of the world price of carbon was substantially managed 2 years ago when the Government decided to put a ceiling on the price in the New Zealand economy of $25 per tonne of carbon dioxide over the first commitment period. If the member thinks we should have more certainty was he expecting a floor as well? 
Mark Peck 
: What other reports has the Minister seen about issues facing the electricity sector? 
Hon PETE HODGSON 
: I have seen many many reports including some particularly interesting ones suggesting that the changes made by the National Government in the 1990s were a mistake. Those suggestions came from the National member for Rakaia Brian Connell. 
Brent Catchpole 
: Is the Minister dissatisfied with the infrastructure audit report because it fails to take into account the fact that reserves of hydro storage would last only 6 weeks and that the storage is not being properly monitored? 
Hon PETE HODGSON 
: I am satisfied with the report. I think it is a very good report. It is out of date already and the 6-week storage reserve of our New Zealand hydro has been known to most New Zealanders for many decades. 
Jeanette Fitzsimons 
: Does the Minister believe that the audit report’s failure to mention the domestic sector—which uses a third of all electricity—at all and its failure to mention the very significant neglected opportunities for energy efficiency across all demand sectors are an accurate reflection of the issues facing us? 
Hon PETE HODGSON 
: The member is absolutely right that the report right through the various types of infrastructure is very supply-side driven. We asked for that. That does not mean the Government is in any way downplaying the very significant role that the demand side can make. It is making quite a lot of it already. It can make quite a lot more. 
Gordon Copeland 
: Is the Minister prepared—if not right now then maybe in the future—to look at abandoning the Max Bradford reform by allowing both electricity-generating and line-owning companies to move back to full vertical integration provided that generation distribution and retailing activities are ring-fenced through subsidiaries? 
Hon PETE HODGSON 
: The problem with that is that if we were to do a both-ways shift around again apart from the fact that lawyers would get rich for another 2 years in a row we would end up with a non-competitive structure because we would end up with regionalism. We would end up with fully integrated services in say Auckland or Hamilton and rather little competition as a result. That is the problem with the Bradford reforms. Not only were they wrong they were substantially irreversible. 
Hon Roger Sowry 
: Will the Minister take any action as a result of the finding by the infrastructure audit report that the Electricity Commission—which is his Government’s solution to the electricity supply problems—is the cause of ongoing uncertainty amongst electricity generators and is having the effect of causing them to postpone investment decisions? 
Hon PETE HODGSON 
: That report was written about October or November of last year. The commission took up its office in about September of last year. It was new. It is now May of the following year— 
Hon Roger Sowry 
: Nothing has changed. 
Hon PETE HODGSON 
: The member says that nothing has changed. 
Hon Roger Sowry 
: They are still saying the same thing. 
Hon PETE HODGSON 
: They are still saying the same thing! Leaving aside the fact that it has since completed and put into place the entire rule structure the member said that nothing has changed. I think he needs a new portfolio.