Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 19 June 2012. Volume:681;Page:3042. Text is incorporated into the Bound Volume.] 
6. 
Hon CLAYTON COSGROVE (Labour) 
 to the  
Minister of Energy and Resources 
: Does he agree with Molly Melhuish’s calculation that the amount charged by SOEs for electricity for an average consumer is $265 per annum less than is charged by non-SOE retailers and if not what was the weighted average of the annual total retail price charged by SOEs and their subsidiaries to a residential consumer using 8000 kilowatt hours of electricity compared with the weighted average of the price charged by non-SOE suppliers according to the most recent data? 
Hon PHIL HEATLEY (Minister of Energy and Resources) 
: 
 No. I am advised that she has not included all underlying factors—for example she does not note that private retailers generally have a stronger market presence in more expensive-to-serve areas whereas State-owned enterprises are more concentrated in the three largest cities which are less costly to serve. Her calculation also does not account for variation in line charges which can vary by as much as 11c per kilowatt hour and it does not account for regional variations or seasonal variations. 
Mr SPEAKER 
: Order! This was a primary question on notice. The Minister in answering would have been absolutely correct had the question asked whether he agreed with Molly Melhuish’s calculations and if not why not. But the question did not ask that. The question asked whether the Minister agreed with those calculations and if not what was the weighted average of the annual total retail price charged by State-owned enterprises and their subsidiaries to a residential consumer using 8000 kilowatt hours of electricity compared with the weighted average of the price charged by non - State-owned enterprise suppliers according to the most recent data. The Minister’s officials have had a couple of hours to work out the arithmetic and if they cannot work it out they should be sacked. The House deserves an answer. 
Hon PHIL HEATLEY 
: Further to answering the first part of the question as the member can appreciate the second part of the question is complex. It has not been possible to provide a detailed analysis of the calculation because of all the scenarios provided—first of all where in the region the generation occurs what type of electricity generation it is what season it is whether lake levels are high or low what the lines company charges are and there are 27 lines companies. It is simply not possible to provide that information. 
Mr SPEAKER 
: I have got to accept that the Minister does not have the information but it would seem to me that where a question is on notice it should be answered. There is no problem in explaining why an answer may be misleading but—members should not interject—it would have been helpful though to have an answer. I mean it is possible to calculate the answer to that question. There may be all sorts of reasons why the answer is actually misleading for a whole lot of reasons and there is nothing wrong with explaining those reasons once the answer is given. But what the Minister is telling us is that it is just not possible to calculate an answer to that question when all the officials in that Minister’s department have had a couple of hours to actually work it out. It is just to me a great concern where officials think they can get away without answering a question on notice. There may be all sorts of reasons why the answer to the question is misleading for a whole range of circumstances which the Minister has told the House about. But that does not preclude an answer to a question being given. I will hear the Minister further if he has a further answer on that. 
Hon PHIL HEATLEY 
: Perhaps I have not been clear. There are such a large number of answers to that question based on various scenarios that have not been detailed enough in the question: what time or where where in the country under what circumstances which lines company what season what region and so on and so forth whether it is rural or urban—there are so many answers. That is my point. 
Hon Trevor Mallard 
: Is the Minister aware that the average price and the volume sold for each of the private and State-owned enterprise companies sit on the Ministry of Economic Development website and it is possible to do the calculation as Molly Melhuish did by reading that website? 
Hon PHIL HEATLEY 
: I am aware of the website and I am aware of the prices on that website. What it says is that private companies are currently the cheapest in Auckland Central Hamilton Manukau Christchurch Dunedin Northland Whangarei Counties Waikato Hutt Valley Porirua and Golden Bay. But that could change at any time depending on the season which lines company and whether or not it is a dry year etc. etc. etc. 
Hon Clayton Cosgrove 
: Does the Ministry of Economic Development’s quarterly survey of electricity prices for a customer using 8000 kilowatt hours of electricity a year show that State-owned enterprises charge on average less than private energy companies? 
Hon PHIL HEATLEY 
: That would depend on which energy companies they are being compared against what part of the country they are providing for—North Island or South Island or what region—which lines company they are using what season it is whether or not it is a dry year etc. etc. etc.. There is such a variance in factors that the question is simply not specific enough. 
Hon Trevor Mallard 
: This was a very tight question which asked about the average. I thought that Minister would recognise that word. 
Mr SPEAKER 
: Order! That is not the way points of order are to be handled at all. I think given the answers that the Minister has been giving to the House I have to accept that it is the Minister’s view that such an average cannot be calculated so I have to accept that advice. The member heard my view of the initial question that mathematically I believed it was possible to calculate an answer to it but the Minister has told the House that for a range of reasons such figures cannot be produced realistically and I have to accept that. 
Hon PHIL HEATLEY 
: I raise a point of order Mr Speaker. Can I just make a correction there. What I said I believe in my previous point of order—I just did not want you to feel that I misrepresented it—was that there is such a range of answers because it depends on such a wide range of factors. Yes certain calculations can be made but you need more input information in order to come up with the information so that is what I was saying. 
Mr SPEAKER 
: Order! We will not continue this by way of debate. One of the interesting things is that mathematically it is still possible to come to a weighted average but still that is only the stupid Speaker who thinks that. 
Hon Clayton Cosgrove 
: We do not think you are stupid. Are the lowest prices in the electricity market according to the Ministry of Economic Development charged by the State-owned subsidiary Energy Online? 
Hon PHIL HEATLEY 
: Sorry could I hear the question again? 
Hon Clayton Cosgrove 
: I will go slow. 
Mr SPEAKER 
: Order! The member will not make that kind of comment. Just repeat the question. 
Hon Clayton Cosgrove 
: To the Minister— 
Hon Gerry Brownlee 
: He wants to understand it himself. 
Mr SPEAKER 
: Order! I will ask the member to repeat his question please. 
Hon Clayton Cosgrove 
: Are the lowest prices in the electricity market according to MED—that is the Ministry of Economic Development—charged by the State-owned enterprise subsidiary Energy Online? 
Hon PHIL HEATLEY 
: I do not have that information in front of me at this point in time. But what I can tell you is that private companies at the moment that are cheapest from what I understand are in Auckland Hamilton Christchurch Dunedin Whangarei Counties Waikato Hutt Valley Golden Bay Marlborough Nelson City and Tasman. That could change at any time. I am sure there are places in the country where State-owned enterprises provide the cheapest electricity prices but that would depend on a range of factors which I have listed in previous answers. 
Hon David Parker 
: I raise a point of order Mr Speaker. This sort of underlines the point that you yourself made in response to the Minister’s lack of an answer on the first question because we are left flailing asking these questions when on notice we asked what the average was. He can point to individual instances and that is why we actually want to know what the meaningful figure is which is the average. I invite you to give a considered ruling as to whether the Minister ought to have answered the second part of the primary question No. 6. What are we to do in the Opposition if we cannot get the Government departments to address what are reasonable questions to which there are real answers? 
Hon PHIL HEATLEY 
: One of the difficulties is that they have actually asked for the weighted average and we have taken that—or I have certainly taken that—as the number in the population in each area that is paying a certain amount of price versus the other a weighted average. The difficulty is that we have got about 35000 people switching a month which is over 1000 a day so it is such a moving feast that it is very difficult at one point in time to calculate. 
Mr SPEAKER 
: Order! I think I have heard sufficient on this. Look it would be most unusual for a considered ruling to be required on such a matter as this. I think the Speaker has made his view pretty clear on the matter and I think that is where it has to end. But I would have been surprised had the weighted average related to switching consumers. I would have thought electricity usage and the rates charged for the amount of electricity being used would produce a weighted average and mathematically I am sure that I could sit down myself and work something out but still. 
Hon David Parker 
: I raise a point of order Mr Speaker. The reason I raise it is to ask what remedy we have. The Minister can ignore that and we— 
Mr SPEAKER 
: Order! I think the remedy is that officials know that the Speaker expects this kind of question to be answered. Ministers and officials know that it is not that great to have the Speaker concerned that officials have left a Minister exposed through not providing the information. I suspect that that is enough discipline to make sure it is unlikely to happen too often in the future. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I am a former Minister of State Services and I would like to ask you to think carefully about your last ruling which I think you headed towards in an earlier ruling. In the House Ministers are responsible. We do not know what briefings they have and he should take responsibility in here not his officials. 
Mr SPEAKER 
: Order! I hear what the member has said. We are not going to take any more time on this today. I do not think the House has heard a Speaker be as tough on a Minister and officials as you heard today and I think the Opposition should be fairly grateful that a Speaker is prepared to go to that length to make sure questions are answered. 
Hon Clayton Cosgrove 
: If the State-owned enterprises charged more on average than private companies does not the Minister think he would have made that point the primary argument of his Government’s campaign to sell State-owned enterprises? 
Hon PHIL HEATLEY 
: I disagree with the basic premise of the question and we are not selling State-owned enterprises; we are presenting a mixed-ownership model whereby the Government will retain majority control. 
Hon Clayton Cosgrove 
: Why has he as Minister of Energy and Resources along with his colleagues the Minister of Finance and the Minister for State Owned Enterprises not sought advice about the residential price impact of the biggest change in the industry which is on his watch? 
Hon PHIL HEATLEY 
: The Minister for State Owned Enterprises has stated publicly that it is not who owns the energy companies that influences prices. It is more like the big list that I gave— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. With respect the question was specific and asked why advice had not been sought. We have had it confirmed both by the finance Minister and the Minister for State Owned Enterprises in different forums that they have not sought advice and this Minister— 
Mr SPEAKER 
: Order! I think in fairness the Minister is giving his response to that. It asks for an opinion why something was not done and I think the Minister is doing that. 
Hon PHIL HEATLEY 
: The Minister for State Owned Enterprises has stated publicly that it is not who owns the energy companies that influences prices. He has had assurances from his team and I have had the same feedback from him.