Sharples Pita: Electricity Industry Bill — First Reading 
Sharples Pita: Electricity Industry Bill — First Reading 
[Volume:659;Page:8577] 
Hon Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 There used to be a smart catchcry in New Zealand. It was: “Will the last person to leave please turn out the lights.” Well over the last couple of years the lights probably would have been replaced by a candlestick. Why? Because there has been a massive 65 percent increase in the price of electricity in the last decade while in the same space of time there has been a 34 percent increase in inflation. So one does not have to be an accountant— 
H V Ross Robertson 
: Or a genius! 
Hon Dr PITA SHARPLES 
: —or a genius—to work out that electricity prices have increased at almost twice the rate of inflation which is a 31.9 percent difference. 
Many of us in Aotearoa in the context of electricity will be forever traumatised by the death of South Auckland mother Folole Muliaga hours after the electricity supply was disconnected to the family home. Although the Ministerial Review of Electricity Market Performance suggests that a large part of the increase in electricity prices over the last decade is justified prices to some customer groups especially residential households have risen faster than justified by the generation cost increases. These things cause us particular concern in the context of low-income families so many of whom are Maori. When we learn that Consumer New Zealand is supportive of the bill it has to give us good heart. 
As a party the Maori Party has fought consistently to address the situation faced by low-income families struggling simply to survive. We know that Maori households tend to spend more on electricity and liquid fuels than non-Maori and they also use a greater share of their total weekly spend on such items. When we entered into negotiations around the emissions trading scheme we became aware that although a greater impact on Maori households can be predicted for emissions trading scheme - related electricity price rises this is possibly not the case in respect of liquid fuels given that more affluent Maori households tend to spend a relatively higher share of their weekly spend on fuels than do other Maori and similarly affluent non-Maori. 
That raises a possible case for greater targeting of support to households for emissions trading scheme - related rises in electricity prices. So we were delighted to achieve a 50 percent increase in support in terms of electricity costs for 2 years as part of the Maori Party’s support for the scheme. That translated into a 5 percent increase in electricity prices instead of a 10 percent increase. It all adds up but as always we will not be satisfied until we can come to the best possible arrangements for our people. 
This bill disestablishes the Electricity Commission and instead sets up the Electricity Authority which will have a very specific pro-competition focus. So how exactly will that benefit Maori? We are optimistic that the authority can promote the benefits to consumers of comparing and switching retailers. There is also specific provision for a $5 million-per-year fund to facilitate consumer switching. Although this is positive we wonder whether the $5 million-a-year fund to facilitate consumer switching might be better spent educating New Zealanders on how to consume less rather than on how to switch companies. 
I return to the broader aim of the bill which is regulation of the electricity industry in order to improve competition in the electricity market and improve the security of electricity supply. So the purpose of the bill is to increase competition in order to keep price rises down particularly in the retail market for residential customers. There is some uncertainty as to whether the provisions of the bill will be able to achieve its purpose of increasing competition. Some electricity companies are saying that the asset swap will create uncertainty and risk creating reluctance for companies to expand nationally; others are supportive. 
Another important question we have given the corporate model of electricity supply is whether the increased competition will actually facilitate the minimising of electricity price increases so that households will face only necessary price increases. Will it simply be as ineffective as switching between petrol companies? We are aware that customer switching can effect change and keep down prices such as in the situation with Contact Energy in 2008 when it wanted to raise prices considerably including to cover increased directors’ fees. The company lost more than 40000 customers in a short space of time which is much more than the average amount of switching that goes on which is about 23500 in an average month. Sector-wide it is 12.5 percent and it includes those moving house. 
Significantly we are mindful that the ability of the Minister to regulate on price is being removed via this bill. Although the bill allows the Minister to make regulations relating to fairness issues for consumers which is all very good in many ways it is simply playing with the various chess pieces on the board. The provision is necessary as fairness is not an objective of the new Electricity Authority as it was for the Electricity Commission. 
The bigger picture however is energy conservation and investing in sustainable energy—two objectives of the Electricity Commission that will not be transferred to the Electricity Authority. In many ways then the amendments the bill makes to the energy sector as a whole could be said to be in the wrong direction. It does not address growing energy demand or facilitate the roll-out of renewable energy generation. This is one of the key issues that we will be seeking to receive further wisdom on at the select committee. 
There is a need to continue to invest in sustainable energy generation and to do so within a sustainability framework given that electricity prices will continue to increase with oil price increases and given that electricity production will come with an increasing carbon price tag attached. We are really interested in the range of options our people are currently exploring: the establishment of micro-grids for rural communities consisting of small-scale wind solar micro hydro and anaerobic energy systems while also maintaining a connection with the national grid. This will both lower costs and improve security of supply. 
Finally I return us to the global landscape and I call on the wisdom of those who attended the Indigenous Peoples’ Global Summit on Climate Change at Anchorage Alaska in 2009. The Anchorage Declaration which arose from that summit concluded: “We are experiencing profound and disproportionate adverse impacts on our cultures human and environmental health human rights well-being traditional livelihoods food systems and food sovereignty local infrastructure economic viability and our very survival as Indigenous Peoples.” 
There are many key issues impacting on our people around electricity use. The Maori Party has always sought to promote the development of renewable energy sources including wind and solar in order to protect and preserve limited resources such as oil gas and coal. We have many questions about this bill that still require further discussion but we believe that the basic premise is certainly worth supporting. We are voting in support of this bill at its first reading and we look forward to the evolving debate.