Brownlee Gerry: Questions for Oral Answer — Questions to Ministers 
Brownlee Gerry: Questions for Oral Answer — Questions to Ministers 
[Volume:607;Page:4199] 
9.  
GERRY BROWNLEE (NZ National—Ilam) 
 to the  
Minister of Energy 
: Has he been informed of the comments by Tiwai Point aluminium smelter general manager operations Tom Campbell regarding the current price and availability of electricity in New Zealand where he says “We are very concerned what this means for the winter and about the future of power supply in New Zealand”; if so is he also concerned? 
Hon PETE HODGSON (Minister of Energy) 
: 
 Yes I have been informed and yes I am concerned. 
Gerry Brownlee 
: In the light of the fact that the hydro lake levels are at only 86 percent of the average level for this time of the year that the lake inflows are at only 67 percent of the average level for this time of the year and that electricity demand for the first 2 months of the year was 6 to 7 percent higher than the demand last year does he believe that there is a possibility of electricity shortages brownouts and blackouts this winter; if not why not? 
Hon PETE HODGSON 
: I discussed those matters at some length a few days ago with the major electricity users group of which Comalco is a member. Industry generally understands the fact that thermal power stations have this year been running much harder much earlier than is normal—and I do not think that industry would declare itself to be happy about that. There are two reasons for that: firstly there is a possibility of a dry-year risk but it is simply too early to say; and secondly some questions regarding the ready availability of alternative fossil fuels this winter still remain outstanding. 
Mark Peck 
: Can the Minister tell us what the underlying problem is given that dry-year risk is something we face every year? 
Hon PETE HODGSON 
: The member is quite correct. The underlying problem is that the Maui gas field is running down earlier than expected. The next major gas field Pahukura is not yet on-stream so the increased use of coal and distillate for electricity generation is very likely this year and probably for the next 2 years as well. 
Gerrard Eckhoff 
: What is the Minister’s view of the bureaucratic planning procedures imposed under the Resource Management Act which will delay the construction of even renewable sustainable energy developments such as Project Aqua for years; and will the Minister revisit the hydro development proposal for the West Coast or will he continue to allow the Department of Conservation to dictate New Zealand’s energy development? 
Hon PETE HODGSON 
: Generally speaking the planning legislation works quite well for—as it happens—non-renewables because they are generally smaller and more compact. But the member does raise an issue of consequence in respect of renewables which is why the Government about a month ago indicated its intention to change the Resource Management Act. The legislation will be introduced later this year. 
Gordon Copeland 
: Is the Minister concerned at the rapid increase in the wholesale price of electricity and the inability of New Zealand companies to obtain long-term supply contracts and does he have some answers to those concerns? 
Hon PETE HODGSON 
: If the member is referring to high prices today that is occasioned by the fact that a bit of kit has gone down and will probably stay down for several days I believe. As far as people being exposed to high prices is concerned businesses that are high consumers generally insulate themselves from the spot market through buying hedges which are more expensive than the average spot price but less expensive than the current spot price. 
Jeanette Fitzsimons 
: Given the failure so far of the deregulated energy market to deliver security of electricity supply or other elements of the Government’s policy statement and hence the likelihood that the Government might need to regulate the industry further at some stage will the Government refrain from making any further commitments under the General Agreement on Trade in Services in energy services which would further restrict the Government’s ability to regulate the electricity market; if not why not? 
Hon PETE HODGSON 
: There are long bows then there are gigantic ones. I rather suspect that we have just seen an example of the latter. 
Gerry Brownlee 
: Does he agree with the power company TrustPower which has said that New Zealand faces the prospect of either cutting production in our industrial establishments now and saving on household consumption now or having blackouts and brownouts this winter? 
Hon PETE HODGSON 
: Generation companies and retailers in general are moving to inform the public that a bit of conservation now might not be a bad thing. TrustPower’s press statement yesterday is one example of that. There are several others.