Young Jonathan: Estimates Debate — In CommitteeText is incorporated into the Bound VolumeYoung Jonathan: Estimates Debate — In Committee[Sitting date: 31 July 2013. Volume:692;Page:12170. Text is incorporated into the Bound Volume.]JONATHAN YOUNG (Chairperson of the Commerce Committee):I am very pleased to speak after the last speaker Moana Mackey and just answer some of the questions that she has put forward. Moana Mackey contended that the line charges are not to do with the increase in power that it is all to do with retailers. For her information and for her betterment I have researched the last 10 years of power charges in New Plymouth. If she will look over this way she will see on this graph that the rate of increase for line rates has increased over the last decade and the rate of increase for retail is actually trending downwards.I have gone through Ministry of Economic Development spreadsheets for every quarter of the last 10 years looked at every—Moana Mackey: It’s dishonest.JONATHAN YOUNG: It is not dishonest. That is the truth. These are facts—these are facts. I can show them to you if you would care to have a look.The Labour Party and the Green Party of course are presenting to New Zealand the concept of a single-buyer market and a person whom they are quoting is Professor FrankWolak. They used his comments a number of years ago—4 to 5 years ago—to claim that generators have been taking super-profits out of the New Zealand electricitymarket of something around about $4.3 billion. Well he was in Wellington this week and let me quote fromEnergy News . It says: “ ‘Moving to a single-buyer market for power generation would do nothing to improve competition while a cost-based approach to pricing output also runs the risk of undervaluing water resources.’ a visiting US academic says. Stanford University’s Professor FrankWolak says he can’t see why New Zealand would want to turn its back on the electricity market structure it has now.” That is what their expert has said this week in Wellington.We do need to understand what has affected the increase in the prices of power. A number of these increases have happened through regulation increase in terms of the emissions trading system charge which has increased the cost of electricity by around about 4 to 5 percent and secondly the emissions trading scheme increase as well. If you take out those two regulatory increases that have happened if you look at the increase that has happened over the last number of years you will see that the increase in electricity cost for New Zealand consumers is around about the rate of inflation maybe a fraction above certainly within the rate that the Reserve Bank has to monitor and we can be very confident about that.We also know that Transpower has been upgrading the national grid. Over this decade starting in 2012 it is going to be expending around about $5 billion. In June 2008 Transpower commissioned an independent review of its maintenance practices and spending. This report by the Auditor-General which came to the Commerce Committee said: “Discussions with staff from both Transpower and the contractors revealed a workforce that has an innovative approach to solving problems. This has been driven mainly by a need to keep operational an aged asset base as little asset replacement has been undertaken on a broad basis in the last decade.” So under Labour’s watch the national grid became aged with very little replacement of that infrastructure. Some 39 percent of the switchgear assets are of the old technology with an average age of around 37 years.The Auditor-General in a reportTranspower New Zealand Limited: Managing risks to transmission assets  states: “We found that Transpower knew that the grid was becoming less reliable and performing worse. While it was still building staff capability Transpower could not focus on both grid reliability and capacity so it made the strategic decision in 2003 and 2004 to focus on addressing the grid’s capacity issues. The issues of age and necessary replacing and refurbishing of grid assets were given a lower priority.”Who was the Minister of Energy at that particular point in time who signed that off? Because we are right now spending $5 billion catch-up money to ensure that our national grid is robust and gives security of supply to New Zealanders in their households and in their industries. We know in New Zealand what happened when theMāui Gas pipeline sprung a leak.