Electricity and Gas Industries Bill — First Reading 
Electricity and Gas Industries Bill — First Reading 
[Volume:613;Page:9823] 
Electricity and Gas Industries Bill 
First Reading 
Hon PETE HODGSON (Minister of Energy) 
: 
 I move  
That the Electricity and Gas Industries Bill be now read a first time. 
 I will be recommending that the bill be referred to the Commerce Committee for consideration. In the interests of providing certainty and stability for the electricity and gas sectors I believe that it is important that this bill be passed without undue delay. To facilitate this I will seek leave for the committee to sit during the sitting hours of the House. 
The electricity and gas industries are critical to New Zealand’s economic growth. The Government’s policy objectives are set out in the Government policy statement on the gas industry released in March 2003 and in the draft Government policy statement on electricity released for comment in September and due to be finalised later this year. This bill updates the statutory framework to give effect to Government policy decisions on electricity supply security and on governance of the electricity and gas industries. It reflects the Government’s overall objective to ensure that electricity is delivered in an efficient fair reliable and environmentally sustainable manner to all consumers. It also reflects the Sustainable Development Programme of Action and other relevant Government strategies such as the National Energy Efficiency and Conservation Strategy and the growth and innovation framework. The inability of the electricity industry to reach agreement on self-governance arrangements has required the Government to take responsibility for industry governance. The gas industry is considering developing its own self-governance arrangements and it is important that backstop legislation is in place should it be needed. 
The bill amends the Electricity Act the Gas Act the Electricity Industry Reform Act the Commerce Act and the Crown Minerals Act. 
Amendments to the Electricity Act update the functions and results required of the Electricity Commission. Enhanced powers for ensuring security of supply are provided including enabling the commission to contract for reserve energy supplies. Existing electricity governance regulations relating to the wholesale market generation transmission distribution and retailing of electricity are replaced by a more extensive range of regulation-making powers. These new powers which are now necessary given that the Government rather than the industry is the regulator relate to the securing and use of reserve energy consumer protection the promotion of retail competition improved information for market participants better hedge and contract markets and the development of distributed generation. Recognising the importance of open access to processes for resolving complaints relating to electricity companies the bill requires all electricity distributors and retailers to participate in a complaints resolution scheme approved by the Electricity Commission. 
The Electricity Industry Reform Act is amended to increase the amount of generation that lines companies may own. This includes reserve generation and new renewables without limit and other generation up to 25 megawatts or 10 percent of maximum network load. The bill also abolishes the unnecessarily restrictive requirement that generation owned by lines companies be connected to the lines company’s network. 
The establishment of the Electricity Commission means it is important to clarify boundaries between it and the Commerce Commission in respect of controls on electricity lines companies. The bill does this. In particular all Commerce Act powers relating to Transpower’s pricing methodology are repealed and the Commerce Commission must not set quality standards for Transpower. The Electricity Commission will hold these responsibilities. Further the Commerce Commission will have to take account of electricity governance regulations before exercising any of its control powers in relation to quality standards applicable to Transpower pricing methodologies for lines businesses and levies payable. 
The bill also provides for the transfer to the Electricity Commission by Order in Council of all Commerce Commission powers in respect of the control regime for electricity lines. These powers can be transferred either for Transpower or for distribution businesses only after 31 December 2005 and if certain specified tests are met. The Electricity Commissionhas an enormous workload before it and in the meantime it makes sense for the Commerce Commission to complete its current work on the control regime for lines companies. 
The bill seeks to provide consistency to the regulatory framework covering the gas and electricity sectors reflecting the linkages between them. Its regulatory powers in respect of the gas industry may be further refined as we work through the legislative process in parallel with the industry’s efforts to define its preferred governance arrangements. The bill includes provision for the Electricity Commission to be expanded to govern gas if necessary and for it to be renamed the Energy Commission in that event. The bill amends the Crown Minerals Act to provide regulation-making powers enabling more extensive disclosure of information relating to gas and oil reserves. This will enable improved investment decisions and enhanced security of electricity supply given the importance of gas for electricity generation. 
Although the bill contains an extensive range of regulation-making powers the gas and electricity Government policy statements make it very clear that the Government expects the Electricity Commission—and the Energy Commission if it is ever formed—to use persuasion promotion and the provision of information and model arrangements to achieve policy objectives wherever possible. The regulation-making powers are there as an incentive for reaching voluntary arrangements and are to be used only if necessary. 
The Electricity Commission will not be independent of the Government. That is deliberate because the commission exists to give effect to Government policy. However the bill includes amendments to the Electricity Act to provide a number of checks on ministerial powers. The Minister can no longer recommend a regulation or make a rule without a recommendation from the commission. The Minister can no longer reject or defer a recommendation unless he or she considers this will better meet the commission’s objective. The Minister cannot amend the commission’s recommendations unless this gives “substantive effect” to them. And the commission is no longer required to consult the Minister before making recommendations. The prohibition on a court from invalidating regulations or rules because of inadequate consultation has been deleted. However to avoid a potentially chaotic situation a 6-month grace period is provided before any regulations may be made invalid. 
This bill sets the legal framework for the next phase in the development of New Zealand’s electricity and gas industries. The Government looks forward to working further with the electricity and gas industries and consumer groups to ensure we meet the challenges of a sustainable energy future. 
Hon ROGER SOWRY (National) 
: 
 I come to this area somewhat as a novice but in the few days that I have been given the opportunity as National’s spokesperson on energy to start to talk to industry groups one thing is certain—they do not like this bill. I can understand why the Minister—who has suddenly had to leave the Chamber— 
Hon David Cunliffe 
: They have had their chance. 
Hon ROGER SOWRY 
: Minister Cunliffe says they have had their chance. I am sure they will be interested in that view. They are saying that this bill is too bureaucratic; that it will result in huge costs and those costs will be passed on to consumers; and that it is using a sledgehammer to crack a walnut. I do not pretend at this stage to go around saying that there is a concerted view and the Minister is not listening to it; that the bill is being driven by Treasury; or—as Minister Cunliffe has implied—that the bill is in the House because the Government is fed up the industry has had its chance so we are going to deal with it. I do not know which of those arguments is right but I intend to find out. 
It is interesting that some 6 weeks out from Christmas with the House sitting for only 3 or 4 more weeks the Minister has decided to have this bill dealt with while the House is sitting. Clearly he has convinced the United Future party that it should support this bill and I hope United Future or someone will tell us whether there is an agreement that this bill will be passed before Christmas. If it is not going to be passed before Christmas then we are being asked to hear submissions in a hurry—effectively trying to shut the industry and business groups out of the submission process along with some of the energy trusts that are pretty fired up about this legislation. Clearly the Government and United Future want to shut out those groups and pass the bill before Christmas or have a hurried submission process and bring it back to the House in March. That seems a bit hopeless. We all know we cannot deal with it in February because we have the Prime Minister’s statement and a whole lot of other stuff going on. So for reasons I do not yet understand the Minister is trying to rush this bill through. 
The bill creates more regulation and in the form introduced it creates more compliance costs. It is interesting that in terms of gas and electricity the bill as introduced and the commentary written by the Government officials state that compliance costs will increase but they are not able to say as yet by how much in each industry. I would have hoped that perhaps the United Future party would have proven to be a bit of a brake on the Government with this but so be it. 
What is interesting is that there is a sword hanging over the gas industry. The Minister has the gas industry out there looking at itself trying to devise some sort of self-regulatory environment and then putting into this bill the ability for the Electricity Commission to take responsibility for gas industry governance if the gas industry’s proposed self-governance arrangements do not work. Before it has even got off the block before it has even started the Minister has a sword hanging over its head with this bill and this regulation. He is saying: “If you don’t get it right then I will be able to come in there and do something to you”. To use Minister David Cunliffe’s line by way of interjection before it has had 2 years and that is why he has had to sort it out. He nods. He is not even going to give the gas industry 2 years. 
In reality I do not know whose bill this. We know that the Minister lost control of the industry during the energy crisis. The Prime Minister suddenly decided that Pete Hodgson was no longer a safe pair of hands. He could not manage it and was losing his rag around the energy companies. He was sidelined and Michael Cullen set up and headed a committee of Ministers. To be fair the ones I talked to had a lot of faith in Michael Cullen running the process. The Minister indicated that it is now back in his hands and that is probably why we have a bit of over-reaction here. There is a lot of bureaucracy a lot of recommendations the commission will be able to decide to do things and the Minister can totally ignore it. From what I have managed to pick up from this Minister that is all part of the bit of revenge that is going on towards the industry. 
In the speech he read to Parliament it was interesting that the Minister went out of his way to state that the commission would not be independent of the Government. He was very determined about that. He said something—as he does—about that being the way it should be. When we look at the Government appointees to the commission we see that Peter Harris the Council of Trade Unions economist is there and before that Michael Cullen’s economic adviser. Michael Cullen has clearly put that person in there so that he has a line into the commission and can keep tabs. This Minister might have his portfolio back but he is certainly on a very short leash. So Michael Cullen has him there and he has former Labour Party city councillor David Close there as well. He is clearly making sure that this body has a pretty good political input into it from the Labour Party. 
But they are not the majority on the commission. Obviously the commission has some good people on it who have industry experience. To make sure they do not have the run over the politics of this issue the Minister has been quite careful to make sure —as he stated in the House—that the commission will not be independent of the Government. By stating that right up front one can assume that if the commission starts recommending things the Government finds politically difficult then the Government will just not act on those recommendations. The bill actually spells out that the Minister does not have to accept the commission’s recommendations and can choose to ignore them. That is an odd thing to put in legislation. I do not know whether there is a precedent for that but if the Minister ignores those recommendations it is at least spelt out that he or she must  
Gazette 
 that. But I am not sure of the time frames around that whether the Minister has to give reasons or how transparent the process will be. 
In the obviously truncated time we have we will work through these things in the select committee but I am keen to see that we have something that is transparent. I am starting to get the smell of a Minister who has set up a commission who says it will solve any future problems with the electricity market and if the gas market does not look like doing what he wants then he will sick the commission on to that as well. But if logic looks like overcoming politics if people in the industry give good technical advice that is not politically palatable to the Minister then he will ignore it. 
We want to make sure that they can give free and fearless advice—something that is becoming a little bit of a rarity when dealing with this Government. Members can ask any of the Government departments about that. I suspect that we will see a commission that is set up in the same way—a commission that will be more political than anything else that will be used by the Minister to control the players in the industry. That is probably why the players are very nervous about that and why they will be even more nervous now that the Minister will try to ram this bill through the House. 
Perhaps the next Labour speaker—I see Mr Cunliffe is itching to get out of his seat—will tell us whether this bill will be passed before Christmas. If it will not be passed before Christmas why is it so urgent; why do we have to put the companies through this on such a truncated time frame? National will oppose the introduction of this bill but we will work in the committee to see if we can get something better. 
Hon DAVID CUNLIFFE (Minister of State) 
: 
 I acknowledge that Roger Sowry says he is a novice in energy matters. That perhaps means he is on his way to an “outage” of his very own on these matters. Can I also acknowledge Mark Peck the chairman of the Commerce Committee who along with the Minister will be pursuing the implementation of this legislation. 
I would like to take us back very briefly to the introduction of the previous electricity bill which I had the privilege to chair through the then Commerce Committee. It was based on a very simple idea—as much opportunity for the market as possible and regulation only when necessary. That legislation gave the industry the opportunity over several years to regulate itself by coming up with a package of measures under a Government policy statement—which it has singularly failed to do. In retrospect the industry has failed to do so for a very good reason: the structural differences between the interests of various categories of industry players are such that no matter how well that group was led it was impossible for those players to harmonise. Generators have one set of interests transmission interests have another set and the retail sector has another. That is just in electricity alone without mentioning the problems specific to the gas industry where the market is highly concentrated and there is great uncertainty as to the actual level of the reserves that are still in the ground. 
 So we are being absolutely consistent with our philosophy—that is as much market involvement as possible and regulation only when necessary. Guess what? Regulation is now necessary. The ironic thing is that even the market itself is begging us to do that because it wants to have certainty and clarity. The market knows that having clear direction will save it a lot of uncertainty and compliance costs and will allow it to move forward. 
Above all this country needs energy. This not a university debating society exercise for the benefit of the National Party caucus. We want the lights to stay on. That is why we cannot afford to have another 2 years of dilly-dallying. Let us get this bill passed. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 It is not very often that when I hear Mr Cunliffe speak I agree with just about everything he says. In fact this must be the first time ever. In a manner of speaking he even acknowledged that the Government has been dilly-dallying for something like 4 years that we have had enough of that and that he does not want there to be any more dilly-dallying. I agree with Mr Cunliffe that there needs to be a degree of regulation in the electricity industry. New Zealand First was saying that prior to the 1999 election. Indeed I had a phone call from the Rt Hon Helen Clark when she was Leader of the Opposition seeking our view on that and asking for support if and when Labour became the Government. We said prior to that election that we needed a bit more regulation in the electricity industry. The Minister has had one shot at it. He had one shot 2 years ago and did not get it right. To a large degree he ignored our recommendations and chose to go with the Greens just as the Minister of Transport has done earlier this afternoon with regard to roading—ignored common sense totally ignored New Zealand First and he will now have to come back for another bite of the apple. 
We have major concerns about the electricity industry and not-so-major concerns about the gas industry although we do have concerns there. Our first and foremost concern is about the security of supply. This country should never have had to go through what it went through during part of this year and the year before. In this country we should have sufficient power to be able to flick the light switch on and not worry about it. We should be able to say to New Zealanders that electricity is there for their use at a reasonable price. Leaving it to the market as Mr Cunliffe said will not work. There has to be a degree of social conscience and social responsibility in energy policy. 
In summary we advocate a bigger cake of electricity for want of a better term. In this country we need electricity to be produced by hydro wind and solar generation. There is a lot of know-how out there that is not being implemented in this country. With a little bit of incentive and assistance we could harness that technology a good deal better. We also need electricity to be produced from coal. We found to our cost that we have to import coal. Thousands of tonnes of coal now go through the Port of Tauranga to help to solve a problem that had there been a little more foresight would never had occurred. It does not make sense to New Zealand First to export so many millions of tonnes of coal a year to be burnt in power stations in countries that have not signed up to the Kyoto Protocol so that we can harness wind and solar power. We need electricity to be produced from all four methods. 
However there are other concerns with regard to electricity that worry New Zealand First. Some of that concern revolves around the lack of competition in the retail sector and to a degree there is also a lack of competition in the wholesale sector. It has all become very regionalised. We are concerned about some if not most of the lines charges that go particularly to elderly folk who scale back their use of electricity and in fact use it with a sense of guilt as if they are robbing the country of something when they put their light switch or television on. We are concerned about the prices that go through the roof from time to time and we have a particular concern for people on fixed incomes who live under that sort of scenario. A lack of transparency in the accounting system affects the bills that some people receive from their various suppliers. All those issues concern New Zealand First. I do not know whether this bill will address all those concerns but I hope that it will do so. 
I fail to understand why—and this is where I agree with the Hon Roger Sowry—we are pushing this bill through the House so hastily. Why does the select committee have to sit so frequently when we are coming up to a Christmas period? I do not believe there is any real intention to push this bill through the House before Christmas. I do not think that is possible or practical. We should be taking our time and getting it right. That is the advice I gave to the Minister of Transport this afternoon: do it once; do it right. This bill is this Minister’s second attempt at addressing the concerns in the electricity industry. It is his second bite at the same apple. I do not believe we should be doing it in such haste. I urge the Minister to take note of the old saying: less haste more speed. 
New Zealand First intends to play a positive role in the development of this bill. We will listen to the submitters with interest and take on board what they say. The Minister and I have worked together in the past. We do not always agree but I think he would confirm that he always gets a genuine response from New Zealand First. 
We are concerned about the gas industry. We are running out of gas so unless we can find more gas in the reasonably foreseeable future it will have a limited application to our lifestyles. That is of some concern. There is a possible need for some form of regulation that is not there at the moment in that industry. 
I do not intend to say a great deal more except to say that we welcome Parliament looking at these two industries with a view to tightening up on the regulations and taking a balanced approach. We hope this bill will address the major concerns—or all the concerns for that matter—that we have raised and that were raised earlier by the Minister. We will apply ourselves as diligently as possible to ensuring that when this legislation comes back to the House it is workable fair and produces energy for the average New Zealander in particular at a reasonable price. 
GERRARD ECKHOFF (ACT) 
: 
 I find myself in some real agreement on some aspects of the bill with Minister Cunliffe who talked about certainty. Indeed National has talked about that and Mr Brown from New Zealand First has talked about that. Certainty is absolutely essential. All of us would agree that certainty of continuity of supply is paramount in this industry. The real question and where the ACT party differs from many others is how we achieve that certainty. Is not the real question how we can achieve certainty in this essential industry? 
Do we achieve it by having more Government involvement? Let us think about it for a moment. If there is more Government involvement there are essentially more controls and more regulation. Where is the incentive for industry players for those involved in the industry in terms of the technologies that are developing regularly—almost weekly—in this field? Energy source throughout the world is becoming in the eyes of some more scarce. Others say at least 50 percent of the world’s oil reserves are as yet totally untapped. 
But that is not a question for New Zealand at this particular point in time; we are focusing on some of the problems that have occurred just recently in New Zealand in terms of electricity shortages because of a lack of storage in the southern lakes for one. There has been a surge in prices when the level of those lakes has fallen. The Government and the public are not happy with that and they believe that regulation of this industry is the answer. 
The ACT party unequivocally says that no it is not. In fact electricity or indeed gas is no different from any other raw material. One moves it to a manufacturing and distribution source and then one either wholesales or retails it. It is exactly the same with every other industry. For example take the food industry—one that I am involved in. I produce a raw material but I do not have to have controls and regulations. Goodness me I have gone through that phase as so many in the farming community have and it just does not work. It sends the wrong incentives. It will be the same with this bill which the Government seems to be urging through the House with some real haste. What we need in order to ensure continuity of supply is constant investment. 
People within the industry should be looking for new alternatives. Indeed I do not disagree with the Greens that we should be looking at solar sources wind and the whole host of opportunities that prevail. But the Government in its foolishness in ratifying the Kyoto Protocol has taken away absolute certainty of New Zealand’s electricity supply by essentially turning down the massive resource we have in New Zealand called coal. There is no shortage of energy source in this country whether it be hydro energy fossil fuels in the form of coal wind energy solar energy or some other source that we have not yet tapped or even thought about. There is no shortage. The problem is we have more Government more bureaucratic controls and less market determining the future of this industry. For example we have only to look at the Government monopolies—and they do have a virtual monopoly in this industry. It has Meridian Energy Genesis Energy and Mighty River Power. They are the major manufacturers. I ask the Minister why the dividends that the Government is taking from this industry are not going straight back into generation capacity. 
Again we have no shortage of even hydro capacity in this country. At least 36 sites throughout the North Island and the South Island have been identified where hydro development is still extremely viable. We are faced right now with developing the Waitaki River purely because Government controls preclude the ability to have smaller hydro schemes—and I can think of a number in the Otago area that could have taken place if the Resource Management Act did not preclude them. We are about to destroy one of the great braided rivers of New Zealand—possibly even the world. That is not because of private enterprise corporations or irrigators; that river will be destroyed because of regulation because of Government control. Not industry but the Government will determine the future of the Waitaki River and nobody else. Legislation is going through this House right now. Changes to the Resource Management Act will ensure that that happens. I emphasise the point that it is not the market that is destroying the environment destroying our great resources; it is Government control and regulation. 
 There are far better options. For example a far better option would have been the Dobson scheme on the West Coast. It would have been far better to use our coal resources and even—dare I say it—revisit the nuclear option. Those are the trade-offs that New Zealand ultimately will have to make. I do not believe that the people of this country will continue to allow this sort of thing to happen on rivers that are used for whatever purpose whether irrigation or recreational activities such as fishing. 
I ask where we will get our energy sources from if the Government is shutting down the options on us. It effectively has done so. I do not see that we have much option at all. We have to look at the transmission of power throughout New Zealand. I am told that no real investment has gone into Transpower for about 10 years yet our population is surging in growth—under the centre-right I might add not under this Government. I think of the huge surge in growth in Southland for example. The demand for power in Southland is precluded because we cannot find enough energy at this time. All of that has happened not by the free market but by the Government stepping in and saying: “These are the regulations. These are the controls.” We are facing power shortages over the next few years. The scribes around Wellington tell me we will have major power shortages in election year regardless of whether the lakes are full or empty. We cannot keep pace with the demand. If we are to grow our economy by 3 or 4 percent as we need to do we cannot keep pace with the demand. So we are faced with major problems into the future and indeed in the immediate future. 
The signal that the Government is sending to the industry is that it wants the industry to invest but it will control the industry. I ask members what happened in California. What happened when investment stopped as soon as regulations started? There were blackouts. I am not sure whether that will happen in New Zealand but if we continue down the path of belief that Governments controls and regulations are the best way to ensure investment in and development of the industry then I suspect we condemn ourselves to a pretty bleak and rather dark future. 
GORDON COPELAND (United Future) 
: 
 I rise on behalf of United Future to support this bill on its first reading. It is important legislation in that it addresses in a clear and consistent manner several problems that have arisen in the electricity sector. We may not agree with every detail but it is good to see the Government taking such bold and decisive steps with an issue as important as energy infrastructure and supply. Dithering is really not an option particularly with regard to the medium-term security of New Zealand’s electricity supply. I agree with Gerry Eckhoff when he says that we are facing in the near future—over the next few years I think—a grave risk of the demand for electricity outstripping supply. We certainly must do all we can as a Parliament to try to ensure that that does not happen. I think we also have to appeal to the people of this nation to stand together in solidarity and clearly face the fact that we will be short of electricity. We need therefore to come together as a nation and determine a way through this situation. This is not a time for provincial or parochial attitudes; this is a time for us to pull together. We will either pull together on this one or sink together I greatly fear. 
United Future’s policy in principle is to support a free-market model for the New Zealand electricity industry. However as a party of common sense we know we cannot cling to free-market preferences on a purely ideological basis regardless of verifiable facts. Indeed I understand that it was after the Californians completely deregulated that blackouts started and they have gone back to regulation to put that situation right. We understand that in the real world of practical policy outcomes things do not always work out as well as they should in theory. For this reason we are pragmatic enough to accept a compromise based on the adage of as much market as possible and as much Government as necessary. Security of supply stability of price clarity and consistency of regulation are all essential to New Zealand’s economic growth and social well-being both now and into the foreseeable future. 
The facts speak for themselves. We have had two electricity shortages in the past 4 years. We are confronted with scientific projections from both the public and the private sectors that show a looming and serious shortage of readily available gas supplies upon which a large proportion of our electricity generation capacity over the last 15 years or so has relied. Probably the most important part of this bill is the provision for the Electricity Commission to contract for reserve electricity. Provision of reserve capacity to ensure that New Zealand has secured its supply—even in a one-in-60-years dry year—is vital for our economic stability particularly for major industrial investors. It is also vital for the peace of mind of our most vulnerable citizens and I am thinking here particularly of say elderly people living through a South Island winter. The fact is that a shortage of electricity affects all our lives in a multitude of ways. 
That is not to say that the reserve capacity scheme is the only way or even maybe the best way to deal with the problem but it is at least a robust well-analysed way that should not result in too many extra costs for the average consumer. There are few other strategies that can meet those benchmarks at present. 
We will be watching with interest the submissions to the Commerce Committee with regard to the emphasis the bill should have on ensuring that adequate hedge contract options are available for commercial electricity users. We are also interested in strengthening the regime for the holders of guaranteed electricity supply contracts such as Comalco to be able to conserve electricity during a dry year then on-sell on the spot market the electricity it has saved. A market-based electricity-savings regime is something we view favourably and we are interested to see to what degree submitters think it could at least reduce the amount of reserve capacity that the Electricity Commission has to have available. 
 Another preliminary concern United Future has about this bill is the level of regulatory power being given to the Minister of Energy. Although we are pleased to see that the Minister can act only on recommendations from the Electricity Commission we are not so pleased about all the exceptions to the rule. For example the Minister may decide not to act on that recommendation or may defer for any period making a decision on the recommendation. We will be watching the submissions to the select committee for suggestions about those things as well. 
One aspect of this bill that United Future is unreservedly pleased about is the inclusion of efficiency in the objectives of the Electricity Commission. That alone provides us with some confidence that the new regulations will not be allowed to become an unnecessary burden on New Zealand’s economic growth but will instead be of assistance in that respect. 
We are also pleased to see the backstop regulatory powers regarding the gas industry. It is good to see that the gas industry itself will be given an opportunity to create its own industry rules as the electricity industry was. But failing that a regulatory regime for the gas industry that integrates with the new electricity regime will be a positive step forward. 
Overarching complaints about resolution systems for both the electricity and the gas industries are also a positive step. It is vital that ordinary household energy consumers have an overarching complaints regime to which they can voice their concerns. I add as an aside that right now I am the meat in the sandwich of a battle between Genesis Energy and Contact Energy about who will pay to shift a meter at my house that has been incorrectly installed. I am about to take a personal complaint to someone to ask how I can get that meter shifted 12 inches and who will pay for it. I have so far been dealing with the matter for about 4 months. That is a personal anecdote illustrating why we need to have some organisation with the authority to say: “Look guys sort it out and get on with it.” In addition earlier this year I had a bill from Genesis Energy for $4500 worth of gas that it said I had consumed in 6 weeks. My personal experience in 2003 of the energy industry has not been very positive. That is the second problem I have had. 
That is not to say the bill provides all the answers to New Zealand’s energy problems. Even as it provides us with the means to move forward and address energy issues such as security of supply the Government may be pushing us backwards in other areas. For example an obsession with alternative energy supplies such as wind and the delays and uncertainties around a carbon tax under the Kyoto Protocol together with the uncertainty about whether Russia will sign that protocol mean that we may be unnecessarily delaying the proper use of our abundant coal supplies—a concern that Gerry Eckhoff has already mentioned. There is also an obsession with maintaining the exact configuration of the conservation estate—a preservation mentality rather than a land resource issue mentality—which means that promising new hydroelectricity generation schemes such as the proposed Dobson dam scheme are stopped before they can begin. The Resource Management Act has also in some cases proven to be a barrier to electricity generation. 
However that said the Minister of Energy is to be congratulated on the Electricity and Gas Industries Bill. It provides a robust regulatory response to the problems facing the gas and electricity industries and appears to do so with due consideration to economic realities and to the need to keep regulations clear and compliance costs as low as possible. On that basis United Future has pleasure in supporting the bill and its referral to a select committee. 
DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 I am delighted to rise in support of this legislation. I commend it to the House and congratulate my colleague the Hon Pete Hodgson on its introduction. 
LINDSAY TISCH (National—Piako) 
: 
 I wish to take a brief call on the Electricity and Gas Industries Bill. I am particularly concerned about the compliance costs and the regulatory regimes that will be put in place. As the Hon Roger Sowry mentioned in his address National is opposing this bill. However we will be interested to see what the submissions to the select committee state. Page 23 of the explanatory note under the heading “Business compliance cost statement” states quite clearly that compliance costs will go up but there is no indication of how far they will go up. 
We are seeing increasing costs in all sectors of business with this Government. We have had 17 new taxes over the last few years. We are seeing here that the cost of doing business in New Zealand will rise rapidly. If we want people to invest we have to have a climate that does not make disincentives for investment and that does not have the compliance costs that will be associated with this. 
The fourth paragraph on that page states: “A business compliance cost statement will be written at the time the Minister of Energy recommends regulations pursuant to the regulation-making powers in the Bill.” This Government has increasingly legislated by Order in Council using regulations to increase the cost of doing business. As Gerry Eckhoff mentioned in his speech regulations do not allow for investment and he quoted the situation in California. As soon as regulations are brought in they stifle investment. One of the things we are concerned about is the way this bill is drafted and specifically the points about the business compliance cost statement. 
Roger Sowry made the point that this bill coming into effect will not actually stop any shortages of power. We are concerned that this is just another introduction of a compliance cost in legislation that does not allow for investment and that stifles initiative and the innovative approach that we need to adopt in this country so National will be opposing it. 
I said earlier and I will repeat it that we will be very interested in seeing what the submissions are likely to be. We question why this bill is being rushed through at this time. Why are we doing this at this time? It is our view that the haste is unnecessary. Submitters need to be given the opportunity to have a fair lash at this and to be able to come up with alternatives to be able to look at what we believe are the shortcomings in this legislation specifically on the regulatory creep as I call it that we are seeing with business compliance costs. Those are the points I want to mention. National opposes this bill. 
A party vote was called for on the question  
That the Electricity and Gas Industries Bill be now read a first time. 
Ayes 81 
New Zealand Labour 52; New Zealand First 13; Green Party 8; United Future 8. 
Noes 27 
New Zealand National 21; ACT New Zealand 6. 
Bill read a first time. 
Hon PETE HODGSON (Minister of Energy) 
: 
 I move  
That the Commerce Committee consider the Electricity and Gas Industries Bill and that the committee have the authority to meet at any time when the House is sitting except during questions for oral answer and during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 193 and 196(1)(b) and (c). 
 referred to the Commerce Committee 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 68 
New Zealand Labour 52; Green Party 8; United Future 8. 
Noes 40 
New Zealand National 21; New Zealand First 13; ACT New Zealand 6. 
Motion agreed to.