Swain Paul: Urgent Debates — Electricity Industry 
Swain Paul: Urgent Debates — Electricity Industry 
[Volume:608;Page:5854] 
Hon PAUL SWAIN (Minister of Transport) 
: 
 The good thing about this debate is that it has now flushed out two “cold shower” parties. The National Party and the ACT party are in a grand “Cold Shower Coalition”. From that supposed spokesperson on energy for the National Party we heard that the way to fix the problem is to fix the Resource Management Act. That was the simple answer. Well let us have a think about this. Which party introduced the Resource Management Act? 
Jill Pettis 
: Ah I think it was National. 
Hon PAUL SWAIN 
: It was the National Party. That is right. That is indeed right. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. Just before the Minister gets too carried away he should realise that the Resource Management Act was the brainchild of Sir Geoffrey Palmer. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: That is a debating issue. 
Hon PAUL SWAIN 
: It was jointly supported by the National Party and passed under the National Party. That was the point I was about to make. 
The second thing the member forgot to mention on his way through his ramble was that 1300 megawatts of new generation have received resource consent since 2000. That is true. There has been an extra 1300 megawatts since the year 2000 and the reason that they have not come on stream— 
Gerry Brownlee 
: We do these things in a timely fashion and it is timely for me to seek leave of the House to table a parliamentary question answered by the Minister of Energy telling me that fewer than 500 megawatts of new generation have been consented to since the year 2000. 
Document not tabled. 
Hon PAUL SWAIN 
: The point of the matter is that the member said that if we fix the Resource Management Act everything will be all right; if we fix the Act we will fix this problem. 
One of the galling things for people on the Government side of the House is to be lectured about electricity by National Party members. What an outrage! It is absolutely unbelievable. Let us talk about Max Bradford. Shall we talk about Max Bradford? He was conveniently forgotten when the previous speaker wandered through his musings. What did Max Bradford do? He threw the entire industry into the air and created chaos and confusion. He split lines companies and power companies and forced their sale. He privatised Contact Energy then decided he would pray at the altar of the free market. He said that if all of that were done power prices would come down. Well one did not have to be an economist an engineer or a rocket scientist to work out that power prices went up. What should have come down went up and what was up and should have come down went the other way. It is absolutely outrageous. 
Then of course we had the ACT party—another “cold shower” party. What was the policy of Ken Shirley from the ACT party? There was no policy actually. As the Minister of Energy said if we were to look for the policy response from the ACT party we would find there is nothing there. It is just a hollow shadow. I suppose that when push comes to shove and ACT members have to try to provide an answer it is the market—the market will solve the problem. We have heard some absolute gems from a number of people in the ACT party. We have had Mr Prebble himself saying that if we were to have more market it would solve the problem. This is a direct quote from Mr Prebble: “This regulation will remove the possibility of a market solution while distorting the energy sector further. What is wrong with the energy sector is that there is not enough market.” That is what Mr Prebble said but he forgot to mention that the fact of the matter is the market has failed. The Government gave the energy sector a couple of years to sort itself out because that sector had told it not to worry about regulating it—it would fix the problem. But it has not. Mr Peter Brown is absolutely right when he says that we cannot have a proper organised electricity supply when big generators with confused interests are competing against each other. The problem is that there has been too much market. 
If we ask the New Zealand public whether they would rather have cold showers and a market solution or hot showers under the arrangements that have been announced by the Government today we will learn that the vast majority of people in New Zealand tonight welcome what the Government has done and are saying that finally it has fixed the problem. Those arrangements will cost roughly 80c a week and are not a tax but an insurance policy. That is what people want—they want an insurance policy—and if we are to have an insurance policy for the dry year we have to pay an insurance premium of the order of 80c per week to have security of supply. 
Let us go through some of the provisions because maybe a lot of people have not actually heard them. Listening to some of the speeches that have been made today it is clear to me that a number of people on the Opposition benches have not even bothered to read the statement or the speech. Instead they had a conversation with their keyboards about a week ago and banged out a response to what the Government is doing. There are some really key elements of this initiative that I want to outline. 
The first is that the new Electricity Commission will be established independent of the industry and charged with maintaining security of supply to a 1-in-60 dry-year risk level without public conservation campaigns. This was the point that Gordon Copeland raised. It is precisely one of the terms of reference that the commission will have. It says to the industry that we need some insurance that we need to have it sorted out and resolved that we are not going to rely on the market to deliver it and that we have to have an independent group that determines it and brings it on stream. How will it do that? It will do that by contracting with generators for reserve generation and fuel for use in very dry years. It will mean some planning. One of the things that is appalling about this situation is that there has been a lack of planning. 
The reserve generation—in answer to a couple of comments from the Leader of the Opposition who will not be there for long; one can see that when he makes a speech on energy—will be ring-fenced from the market to ensure that enough ordinary new generation will continue to be built. So the reserve generation is ring-fenced away from the normal generation increases to ensure it is there only in reserve. As I have said the additional cost of the reserve generation overall will be less than half a cent a unit—around 80c a week—and spot price volatility in dry years will be significantly reduced. Some of the manufacturers and the big companies have been coming to us to say that with the market arrangement they have had difficulty in trying to plan and difficulty in trying to get hedge contracts. How can they plan? Electricity spot prices are moving up and down to the point where they cannot plan. 
It is fair to say that the National and ACT parties have no solution. They do not know what they are doing. They are the “cold shower” parties. The public will see today that finally we have a solution. It is to provide reserve capacity and to make sure not only that companies have energy to be able to deliver the growth we need in New Zealand but that ordinary New Zealanders are able to have the lifestyle they have become accustomed to. The public of New Zealand will congratulate the Government on the initiatives it has announced today. 
The debate having concluded the motion lapsed.