O'Connor Damien: Electricity Industry Bill — In Committee 
O'Connor Damien: Electricity Industry Bill — In Committee 
[Volume:667;Page:14163] 
Hon DAMIEN O’CONNOR (Labour) 
: 
 I rise to speak because I know that the Minister in the chair the Hon David Carter does not have a clue about this and will not get up and answer the queries put by the previous speaker the Hon David Parker. None the less I will do my very best to offer an opinion. 
Part 3 is the political part. In the late 1990s when separation was forced upon the lines companies a whole lot of staunch National Party supporters were deeply offended that although these good people had worked for their communities protected built and nurtured these lines companies—some companies taking on board generation when necessary—“Mad Max” and his mates in the National Government in the 1990s came along and said to those companies: “You’ve got to get out of that. You’ve got to separate because the market is going to deliver to you and you’re not allowed to be in both areas of the market.” And it was a disaster. Those people were deeply offended. Some of them voted for Labour and put us into power in 1999. I know they still feel deeply offended and Labour moved to address some of their concerns. I acknowledge that this bill opens up the opportunity for more of those companies to have more substantive generation and some vertical integration. I think the commentary on the bill states that it not be too much so as to allow monopolistic behaviour on the basis that the market still has to operate and deliver all these wonderful benefits to everyone. 
That aside the bill allows sensible realignment in areas and particularly in some rural areas. I know that the West Coast in particular had Westpower a wonderful integrated company. It was forced to sell out. I think that something like $40 million was realised by the community. The trust at the time asked what it should do with the money. It was a real dilemma for the people who had built up those assets to provide secure electricity to the community. There was very good infrastructure and the company upgraded the lines system. Any surplus that was generated went back into the infrastructure. It was a very smart model. None the less “Mad Max” the Hon David Carter and his cronies forced separation. The company then had to divest its generation capacity. I know that on the West Coast they got about $40 million. Then the trustees—and I say they were wrong—thought: “We don’t have a mandate to continue to manage this for the community. We’re a lines company so we must distribute this to each and every consumer.” and it did. 
Some retailers did quite well out of that distribution. Some people got $1500 or $2000—a little bonus. The money went “poof”. It was spent. Then lo and behold within a period of 2 years and when Labour was in Government I had that same company knocking on the door saying: “We need some capital to upgrade the line into the West Coast because there is going to be growth in industry” and indeed there has been. It has been an amazing success story. The point is that the stupid ideology that drove the National Government in the 1990s forced that trust to divest the generation capacity and forced it the company thought to divest the capital. So that company is now building back up. I know it will make use of this new provision because it already has some generation initiatives under way and that is great. The company will be able to align the generation and the distribution network. That is sensible but it has taken the National Government a while to learn. Its members are slow slow learners. 
Unfortunately other provisions in the Act that still rely on the market to deliver a great outcome will be flawed and will fail. But there will be some areas where I am sure that as those lines companies are still owned by the community they will for the most part manage that for the benefit of their community. Often in Wellington I am afraid to say the officials in Treasury and in the National Party do not understand that there is a huge amount of goodwill in many rural parts of the country. People do not work just for self-interest; they work for the good of their community. The people who did this through the 1970s 1980s and 1990s to build up those strong and robust lines companies distributing secure supply were deeply offended when the nerds in Treasury and the nerds run by the National Party said: “You’re going to divest this and throw yourselves out into the market.” Well I guess this is some token acknowledgment of the mistakes made then. We are allowing—and indeed the select committee raised the threshold—some vertical integration to occur and that is good. But as I said it is a sad sad state that it has taken too long. 
I read through Part 3 and I raised in the Committee debate on Part 2 the issue of the bureaucracy that we are setting up. This is the Government that decries the previous administration and all the bureaucracy and compliance costs. Under the provisions of Part 3 the High Court is now playing a part in the system. We had the authority set up then we have the rulings panel to deal with disputes for those who may or may not be using the code depending on whether they have been given an exemption and now we have in clause 85: “If the High Court is satisfied on the application of the Authority or any other person that a person has breached a provision of this Part the court may give directions ordering a person in breach to renegotiate any agreement …”. Now we have the High Court playing in the arena. 
Then in clause 87 we see a reference to the Commerce Act 1986 which is fair enough; it pervades most of our legislation. So we have the Electricity Authority the rulings panel the High Court and the Commerce Commission. What a dog’s breakfast from a Government that says it will simplify everything and will get rid of compliance. I ask who will pay for all of this. Who? It will be the consumer. Will it be the big companies? No no; they will always be able to negotiate a better deal. What about the small consumer? Who has been looking after their interests? Well the National Government never looks after the interests of the small people. Look at the tax cuts. It is $1000 a week if one is earning $1 million a year. If one is earning $30000 a year it is about $3 a week. That is what the National Government calls fair. 
Well unfortunately that is the philosophy driving this legislation also. We do not trust the complexity of this legislation to deliver fair deals and fair electricity prices to New Zealanders and certainly not to people on low incomes. That is why we do not support the legislation. That is why we will continue to point that out. I am sure that not too far down the track we will be able to say “We told you so.” The same idiots who said that deregulation and market forces would reduce the cost of electricity in late 1990s have come back to us saying that they did not really mean it. It was said at that time as justification. What we are seeing here is the Minister and National members saying that this bill will improve the electricity industry and deliver better outcomes. 
I do not believe that for a moment. I feel sorry for the officials as they have to work within the constraints of flawed ideology run by the National Government in all of these areas. I ask the Minister in the chair—a slightly smarter and higher-profile Minister Dr Jonathan Coleman is in the chair now—whether he can explain how the Electricity Authority interfaces with the rulings panel and how the High Court can intervene in the issues of separation and the thresholds around how much electricity is generated. Of course that will change from year to year I guess; I am not sure. I am not quite clear on whether the 250 megawatts is maximum capacity or is that average capacity? Maybe that is one of the questions the Minister can answer. Of course the Commerce Act 1986 is overriding all of this. That Act states that we have to make sure there is fair competition. Well it has not ensured that there is fair competition. We have had rorting we have had price gouging and it has been identified—