Hodgson Pete: Electricity and Gas Industries Bill — Second Reading 
Hodgson Pete: Electricity and Gas Industries Bill — Second Reading 
[Volume:619;Page:14712] 
Hon PETE HODGSON (Minister of Energy) 
: 
 The member who has just resumed his seat has the dodgiest CV of any member of this House. He has been investigated by his own party at a high level. He still has not come clean. He says that he is a consultant a banker and someone who works for international conglomerates. The truth is that he owns a farm on the Canterbury Plains. 
Recent history of electricity in this country is that 30 years ago when that member said we had perfect infrastructure we were just getting through the 1975 crisis. That was what was going on then. But within years some bright spark said that we should stick a high dam across the Clutha River near a town called Clyde which happened to be on a fault line. We spent millions of dollars grouting the bottom of the river and then we spent millions more deciding to put a road through to Cromwell where the road did not want to go. Then we spent millions of dollars tunnelling into the hillside and we decided we needed to do that because if we did not de-water the escarpment then the lake would cause it to lubricate and fall into the lake which had just formed and overtop the dam that had just been built. 
That was the Clyde Dam. That was part of “think big” that was Mr Muldoon that was Mr Birch and that was part of the 410000 jobs that were going to come from “think big”. Search parties have gone out looking for those 410000 jobs. They have searched the dominion high and low including the off-shore islands; many of them have not returned but no jobs have been found. So that was the history of the National Party and electricity. 
But wait there is more. The National Party decided it was going to learn from its mistakes so it decided it would deregulate. It decided it was going to privatise. It decided it was going to go to free market and it decided that the market and the price discovery arising from the market would result in just enough electricity—not too much not too little at just the right price that the market would always clear that the people would always be happy and that the lights would always stay on. 
That is what happened with the National Party. It went from one extreme to the other and so we saw the split of ECNZ and its partial privatisation—we put a stop to the rest of it. We saw the so-called “Bradford reforms” which were based on the idea that no one who owned a line could also own an electron—a remarkable bit of public policy. That saw the whole of the electricity industry turned on its ear and a whole lot of people forced to sell assets that their communities had paid for over tens of years—indeed in some cases in Dunedin over a century. That was the “Bradford reforms”. The market would provide; there would be no need for anything! 
 And then guess what happened? In 2001 it stopped raining. What happened then? We started to run out of electricity. Did the price go up? Yes. Were people happy about that? No. Were we going to run out of electricity? Yes. So the then Government this Government intervened in the form of a very substantial conservation campaign. We got a response from the public and we got ourselves out of the mess occasioned by “no market”. In 2003 it happened again. At that stage we said we had had enough. We had put legislation through the House in 2001. It was strongly opposed by the National Party. The Government said: “We will need backstop legislation to set up an Electricity Commission if we need one.” The National Party said that the legislation was draconian. They said it was outrageous. They voted against it. They made a noise even greater than the noise they are making now and when we needed that legislation in May 2003 we put it in without a whimper because the Tories got it wrong again. 
The Tories get it wrong all the time. That is why we have gone from the extremes of “Rob Muldoon and Bill Birch know best” through to “the market knows best” and now we have a managed market and a regulator. Now we have something roughly the same as what the rest of the world has. This legislation completes the job. It gives the commission a few more tools. It does for the gas industry what we have already done for the electricity industry. It means that we have a future in which we can have a little more certainty than we have had before. It allows reserve generation to be built. 
Guess what? We have already built the first bit of reserve generation and I will tell members where. It is at a place called Whirinaki just north of Napier. I will tell members something else about that site. The reason we used it is that there used to be a power station there. Several weeks ago we opened 150 megawatts of diesel. What happened was that the site had already been used in its history for a certain amount of power generation. It was 150 megawatts of diesel. Does that sound familiar? What happened to that 150 megawatts of diesel? I will tell members what happened. The Tories went free market and the plant was picked up by Contact Energy which had become the owners of it under privatisation. They sold the last bit of it in March 2001 just as the rains had stopped. That is what happens when the free market is allowed to go to work. 
Brian Connell 
: Why doesn’t every industry expert agree with you? 
Hon PETE HODGSON 
: The member has decided that he is in favour of the National Party policy. Who knows what it is? He is clearly the next Opposition spokesperson on energy. Until now it has been Roger Sowry before then it was Pansy Wong before then it was Gerry Brownlee and before then it was Max Bradford—although that is a swear word these days. It cost him his job; he has left politics. That party changes its energy spokesperson every 12 months and none of its members get up to speed. 
Just contrast that with the United Future party New Zealand First the Greens—all of those parties know what they are talking about. The Tories do not know what they are talking about on energy and have not known since Doug Kidd ran the show. There was a Minister who did know something about energy. We have a situation where the Tories having a history that has failed at one extreme failed in another extreme and is now busily recirculating its energy spokespersons is going to run out of caucus members. Before too long there will be not one person in the National Party who has not had the energy portfolio. And still they will not know anything about it because they have all held it for about 8 months or whatever. 
So I welcome the new member into the energy portfolio. I congratulate him on his outrageously stupid beginning. I think that is exactly the same beginning that has been made by three or four predecessors. He will get better as they did. As soon as he has worked out how to spell the word “energy” he will have the portfolio taken off him and it will be given to someone else—probably Lindsay Tisch. 
I say to National Party members that they should be supporting this legislation because it is sensible. But because they do not understand the policy at all and never will I do not expect their support. We do not need it and just as well. This is a House of Representatives and those representatives represent those people who choose not to understand. 
I say to the National Party to please try to get a grip on what is happening in the energy portfolio. Please try to understand that their history is far from proud. The 410000 jobs never arose. The free market did not work. Electricity is not baked beans. It will never be baked beans. The National Party has not worked that out. I understand that National Party members in the select committee opposed the raising of the threshold. 
Debate interrupted.