Brown Peter: Questions for Oral Answer — Questions to Ministers Questions to Members 
Brown Peter: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:608;Page:5104] 
12.  
PETER BROWN (Deputy Leader—NZ First) 
 to the  
Minister of Energy 
: Will the Minister inform the House of all of the implications that he has been advised of if consumers fail to achieve the necessary savings to avoid disruption to New Zealand’s power supply? 
Hon PETE HODGSON (Minister of Energy) 
: 
 The implications will obviously depend on the extent of any electricity shortages that might arise if demand continues to grow and supply continues to be constrained. At minimum people can expect the inconvenience of hot water cuts. However if the low inflows to the hydro lakes continue and if the savings are not made now then it is entirely possible there will be more severe economic and social disruption. 
Peter Brown 
: Will the Minister give the House an assurance that people on low incomes and elderly folk on fixed incomes will be able to live reasonably comfortably and not suffer undue hardship? 
Hon PETE HODGSON 
: It would be remiss of me to give any assurance because I do not know what the forecast for rain will be over the next several months. I tell the member that saving now will significantly reduce the chances of people being inconvenienced later. I also tell the member that although we had no blackouts or hot water cuts to speak of in 2001 in 1992 we had hot water cuts that regularly went for 18 hours a day. If one goes back a little earlier to 1973 we had blackouts and constraints in broadcasting time. If one goes back even earlier than that to 1958 and 1947 there were serious blackouts. So this has been part of our history. The real key is to make sure that this year we do not suffer what we did in those earlier times. 
Darren Hughes 
: Besides power savings what other measures can help reduce the risk of electricity shortages this winter? 
Hon PETE HODGSON 
: It is important that demand for electricity is reduced where possible. But we can also take steps to increase supply. To that end the electricity industry’s winter power task force is overseeing efforts to secure new supplies of fuel for thermal electricity generation and is actively exploring options for short-term increases to generation capacity. 
Gerry Brownlee 
: Can the Minister confirm that the formula used by generators to calculate the highest spot price finalised yesterday at Haywards of some $991.63 per megawatt indicates that the price later in the winter should those savings not be achieved could climb as high as $3000 per megawatt? 
Hon PETE HODGSON 
: I can confirm that there is no formula used in the electricity market. It is simply a matter of bids and offers. It is clear that when one gets a very very high spot price settlement as we did briefly yesterday and as I recall the day before then that shows that hydro generators are trying very hard not to generate at all. It also means thermal generation must run as far and as fast as possible. The return of the Huntly power station to full capacity in recent days has been useful in that regard. 
Peter Brown 
: Does the Minister accept that this country needs extra capacity fairly urgently and that the Resource Management Act the Conservation Act and now the Kyoto Protocol are presenting huge barriers to achieve that; if so what is he doing about it? 
Hon PETE HODGSON 
: I do accept that the country needs capacity at the rate of about 150 megawatts a year and there is something like from memory 1600 megawatts that has already been publicly announced as prospective. I do not accept that the Kyoto Protocol or the Resource Management Act constrains development—except for renewables where I think the Resource Management Act is a problem particularly for wind and that is why the Government has already announced its intention to change the legislation in that regard.