Hipkins Chris: Electricity Industry Bill — First Reading 
Hipkins Chris: Electricity Industry Bill — First Reading 
[Volume:659;Page:8567] 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 There we have it! Max Bradford is back and he looks a bit like Gerry Brownlee. Max Bradford would be very very proud of the National Government today. It has picked up his failed tertiary education reforms dusted them off and passed them through the Committee stage of Parliament this afternoon. Now it has picked up his failed reforms to the electricity industry and it is to give them another whirl as well. 
The Electricity Industry Bill is another example of National’s blind faith in the market: it believes that increased competition will lead to lower power prices. But of course that worked so well the first time around! It also believes that the market will provide security of supply. That worked really well the first time round too! Does anyone else remember that in 2001 a year after the Labour Government was elected Max Bradford was still on TV saying the market would result in lower power prices and a greater security of supply? How did that work out? We had an electricity shortage in 2001 and then we had another shortage in 2003. Now the National Government is going back to the failed policies that Max Bradford pushed through in the late 1990s. The former National Government got us into this mess and now National is getting us even deeper into it as well with its blind faith in the idea that the market will provide everything. 
One thing that people who are watching at home will have noticed from Gerry Brownlee’s speech is that there was no mention of the lower power prices that the National Party promised New Zealanders prior to the last election. Does anyone remember that? Gerry Brownlee and John Key went up and down the country talking about the fact that power prices were too high and that a National Government would deliver lower power prices. Yet nothing in this bill delivers lower power prices; it is not even close to doing that. The best that Gerry Brownlee can do is to tell people that they need to shop around. If they want lower power prices he says they need to shop around. There is nothing in this bill that would lower power prices. 
People who are watching at home will be interested to know that the Government has done absolutely nothing to address the growing gap between the prices paid by the large industrial users of electricity and domestic users. Although the prices that people at home pay for electricity have continued to go up in the last year or so the prices paid by the industrial users of electricity have gone down. Interestingly when Gerry Brownlee put his Cabinet paper through he left out the graph of power prices in the most recent year. Why did he do that? Because it highlighted the huge and growing gap between the power prices paid by people at home and those paid by the big commercial users. This bill being forced through by the Government does absolutely nothing to address that particular gap. 
Once again this bill is another example of hotchpotch legislation from the National Government which has no coherent strategy whatsoever. Gerry Brownlee promised us some time ago at the end of last year I think it was that he was going to release a new energy strategy and that it would be released at the beginning of this year. He promised that in early 2009 there would be a new energy strategy. We are still waiting for it. There is no sign of the new energy strategy from the Minister of Energy and Resources. There is no sign either of the new energy efficiency strategy that the Minister also promised. Again here we go: we have hotchpotch legislation with all sorts of different measures but there is no coherent strategy. 
One of the words that were missing from the Minister’s speech was “sustainability”. While John Key and the other representatives of the Government are overseas in Copenhagen talking about emissions reductions sustainability and climate change there has not been a single word about that in the Minister’s speech. Sustainability is invisible in this bill. There is no talk about sustainability whatsoever yet sustainability is a critical part of New Zealand’s energy future. 
The Labour Party believes that any reforms of the electricity sector need to deliver on three key priorities: sustainability security of supply and transmission and affordability and predictability of pricing. To take sustainability first I tell members that the New Zealand Energy Strategy released by the previous Labour Government was designed to achieve a low-emissions energy system with renewable sources accounting for around 90 percent of baseload generation by 2025. That was the goal. We wanted to move to a system that had more renewable electricity generation yet the Government has completely turned its back on the idea that New Zealand should have 90 percent of its baseload generation from renewable sources. Of course that is completely consistent with other measures that this Government has taken. This bill is completely consistent with the decision late last year to repeal the thermal restriction which would have meant that new baseload generation came from renewable sources unless it was required for security of supply. That was out the door as soon as National became the Government. Of course it repealed the biofuels sales obligation which would have created a sustainable biofuels industry in New Zealand reduced our carbon emissions from transport and helped to lead to a more sustainable energy future. 
There was no mention of sustainability in the Minister’s speech this evening. As I have already mentioned he announced that he is scrapping the Energy Efficiency and Conservation Strategy but he has not given a clue whatsoever as to what the new strategy will look like. That is very important in the context of the international discussions that are going on at the moment around climate change. Although the Government may be talking about reducing carbon emissions to 10 to 20 percent below their 1990 levels it is yet to articulate a single policy that will reduce New Zealand’s carbon emissions. No consideration whatsoever is given in this bill to emissions pricing. 
The second priority that I mentioned was ensuring the security of supply and transmission. I think it is important that we put the security of supply in context here because Mr Brownlee’s own ministerial review found that there had been in fact sufficient new generation to meet the demand. So there is no security of supply crisis here. The review that the Government itself commissioned found that sufficient new generation capacity had been added to meet the demand. 
In the longer term the best way for New Zealand to ensure that it has a sustainable secure supply of electricity is to make sure it is renewable because renewable energy sources—Aaron Gilmore is shaking his head and I cannot possibly understand why. A renewable energy source will naturally lead to greater security of supply because if it is renewable then it keeps on going. I will tell Aaron Gilmore what is running out: gas and oil. They will run out eventually and so will coal. If we had renewable electricity it will firstly be cheaper because as the non-renewable energy resources of the planet diminish they become more expensive and renewable energy will become relatively cheaper. In the long term the use of renewable sources will lead to lower electricity prices and to a more sustainable supply of electricity. 
I come now to the third priority that I mentioned: ensuring the affordability and predictability of power prices. Absolutely nothing in this bill will lead to more affordable electricity for New Zealanders at home who are struggling with rising power prices. Some of the power price increase can be explained by the fact that electricity in New Zealand has been very cheap over a long period of time. Maui gas ran out— 
Jonathan Young 
: It is still pumping right now! 
CHRIS HIPKINS 
: It is still pumping but it is running out. The lifting of the cap on the price of the Maui gas caused by the running down of the Maui gasfield has led to a significant increase in power prices which highlights how vulnerable our system is if we rely on non-renewable energy sources to create electricity. 
The solution is to generate more renewable electricity. There are plenty of alternatives to more hydro dams: wind farms tidal electricity and geothermal energy. Geothermal energy has been barely mentioned by the Government; no strategy for geothermal energy has come out of the Government so far. If Mr Brownlee wants to have a more secure supply of electricity then perhaps he should get his act together and start to look more closely at geothermal generation. 
This bill is another example of a bill that is driven by blind ideology on the part of the National Government and it will not work. 
Finally I want to talk very briefly about the asset swap that this bill proposes. That is another thing that will not work and I say the only people who will benefit from the asset swap are the potential private owners who want to buy the State-owned enterprises when the National Government sells them in its second term. National only ever committed itself to retain the generating State-owned enterprises in Government ownership during its first term in Government. This measure is partly driven by National’s desire to get those State-owned enterprises ready to be hocked off. It does not make any sense; it is a completely backward move. The breaking up of the Waitaki hydro system could lead to a loss of water efficiency so it is a short-term thing. Forcing Meridian Energy to take on Whirinaki could result in that station being hocked off to the private sector as well. 
This is a bad bill. It is ideologically driven and the Labour Party will be opposing it.