Brownlee Gerry: Questions for Oral Answer — Questions to Ministers 
Brownlee Gerry: Questions for Oral Answer — Questions to Ministers 
[Volume:608;Page:5912] 
10.  
GERRY BROWNLEE (NZ National—Ilam) 
 to the  
Minister of Energy 
: Does yesterday’s announcement that electricity consumers may soon pay a levy to fund reserve generation which would be made available at a higher price to flatten out price spikes in dry years mean consumers will pay twice for that reserve electricity; if not why not? 
Hon PAUL SWAIN (Minister of Transport) 
 on behalf of the 
 Minister of Energy 
: No. The Electricity Commission levy will recover the cost of securing reserve capacity minus the revenue from any electricity sold from the reserve generation. 
Gerry Brownlee 
: How can the Minister of Energy say “No” when consumers will be paying some $200 million of extra tax levied for reserve generation and the Minister’s statements yesterday made it very clear that should that reserve capacity be required the electricity produced from it would be made available in dry years at a much higher price? 
Hon PAUL SWAIN 
: As the Minister pointed out yesterday one of the problems is trying to get generators to produce capacity for the dry years because nobody wants to take the risk when it may well rain. Therefore the problem is capacity in a dry year. What the measures announced yesterday are about is ensuring there is an insurance premium so that when those dry years occur we have the ability to bring that on stream. It is really interesting to know that the Consumers Institute representing consumers is cautiously optimistic about the plan. 
H V Ross Robertson 
: Why is the Government confident that the cost of securing adequate reserve generation will be less than half a cent per unit on the price of electricity? 
Hon PAUL SWAIN 
: The cost is low because the reserve generation portfolio will comprise relatively low capital cost plant plus heavily depreciated old plant. The fuel though costly will be rarely used. 
Peter Brown 
: Is the Minister aware that the Minister of Energy stated yesterday that the announcement he made would have no impact whatsoever on this year and that New Zealanders must continue to save; noting that and noting we are also short of generation capacity will the Minister tell us whether the Government is considering any initiative financial or otherwise that will encourage the development of increased generation capacity in order that New Zealanders can have an abundance of power and thereby reduce the likelihood of calling on that reserve capacity? 
Hon PAUL SWAIN 
: Yes I am aware of the comment made yesterday. This is designed to fix the problem in the long term. Of course in the immediate term people in New Zealand are still required to save and the 10 percent target for New Zealanders is still a live target. As far as incentives etc. in the future are concerned there have already been a number of announcements from the Minister—for example encouraging wind power. 
Jeanette Fitzsimons 
: Why is the Government refusing to allow this levy to purchase contractually guaranteed specific-demand reductions as well as increases in capacity and what analysis has been done to show which would be cheaper for the country? 
Hon PAUL SWAIN 
: This is a specific targeted measure for dry-year capacity. That is the issue and as the member knows there are a number of other initiatives aimed at energy efficiency. However this is a specifically targeted issue aimed at dry-year problems. 
Gerry Brownlee 
: If the Minister stands by his statements to the House yesterday that he expects some 700 megawatts of normal generation to come on stream in the next 3 years and that there will be additional reserve generation during the same period of time how will he differentiate between normal generation and reserve generation? 
Hon PAUL SWAIN 
: That will be the job of the Electricity Commission. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. Can you tell us what our remedy is now that we have conflicting answers given by the Minister to questions Nos 4 and 10? 
Mr SPEAKER 
: All I can say to the member is that if he cares to write to me about the matter there is a perfect way in which he can do so. I will then give it very careful consideration. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. The issue at hand is whether this country is still in the grip of an electricity crisis. In question No. 4 the Minister said: “No it’s all over. We’ve fixed it.” 
Hon Paul Swain 
: I did not say that. 
Gerry Brownlee 
: I tell the Minister to read his  
Hansard 
. Then in question No. 10 in answer to Peter Brown he said exactly the opposite. It may be in the country’s interest if the Minister were given a moment to clarify the matter. 
Mr SPEAKER 
: No. That is a debatable issue and there is a Budget debate coming up very shortly.