Brownlee Gerry: Electricity (Continuance of Supply) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Brownlee Gerry: Electricity (Continuance of Supply) Amendment Bill — First Reading 
[Sitting date: 23 September 2008. Volume:650;Page:19074. Text is incorporated into the Bound Volume.] 
GERRY BROWNLEE (National—Ilam) 
: 
 The motion that the Electricity (Continuance of Supply) Amendment Bill be now read a first time will indeed be agreed to by the National Party. The history behind this goes back to the— 
Hon Trevor Mallard 
: Flip-flop. 
GERRY BROWNLEE 
: The Minister over there the poor old fellow Trevor Mallard calls out “Flip-flop.” Well if anybody has done a flip-flop on this it is Labour. What I am about to tell Mr Mallard will be I suspect of some interest.  
Back when the Electricity Amendment Act 1993 was going through the House the then Opposition spokesperson on energy the Hon David Caygill was involved in discussions—as is often the case with bills like this which have no political point but have a significant effect on certain communities—with the Hon John Luxton who was at the time the Minister of Energy. A structure was being put together for the way in which lines companies would continue to operate and the way some of the trusts that were around at the time would operate. From my understanding of the situation there were some 68 lines companies—or distribution agencies—in the country at that time. Many of them were metropolitan electricity departments and there were consumer trusts as well as straight companies. When they went through that exercise their number shrank initially to somewhere in the 40s. Today we have 28 companies serving not only tight metropolitan areas but also in many cases quite remote and disparate supply requirements across all parts of New Zealand.  
When consideration was being given as to how big the line should be and how far it should run for any particular company the decision was that it is better to go with the geographical interests that were naturally there and had developed over the preceding 60 or 70 years. That of course meant that some companies picked up people on the end of supply lines who would never ever be able to meet the costs of the energy delivered to them because of the maintenance that would be required on those lines. Any electricity line is an asset that will last for many years. In fact the general thought is that they are 65-year assets. So in order to progress the movement—I suppose one would say the very favourable rationalisation—that was happening it was decided that the particular issue of those at the end of those lines would be put off until some time in the future. By agreement the date was arbitrarily set at 2013—20 years out. The commitment though was that during the intervening years discussions would take place about how those people on the ends of those lines would continue to receive their supply and what the obligations would be on the various companies that were delivering that supply.  
The interesting thing is that 3 years after that when I came into Parliament in 1996—as you yourself did Madam Assistant Speaker—the discussion was still going on. I remember very clearly during the 1998 discussions about electricity reform—5 years after the Electricity Amendment Act 1993—the intense discussion about the end of spur lines as they were known and what was going to happen to them. Spur lines generally refer to Transpower but can be heavy distribution lines as well.  
There was a change of Government in 1999 and much trumpeting from the new Minister of Energy the Hon Pete Hodgson. He said at various points that he had concerns about people on the end of these supply lines. But here we are 9 years later right at the death of the 48th Parliament putting through a bill to sort this out in the way that it should have been sorted out many years ago. Over a number of years plenty of public comments have come from me in my role as Opposition spokesman on energy advocating exactly what is in this bill. There is no point in saying that it is all National’s idea and I am not saying that. It is the logical thing to do.  
This bill will mean that where distribution companies have uneconomic lines they will be able to go to those consumers and offer them an alternative source for their electricity supply. One of the things I am unclear about in this bill though is just what the cost of that supply will be. I would have thought that the bill itself might want to link the end price for delivery—and in fact the cost of energy—to whatever anybody else was paying in the market on any particular day or was paying by way of some longer-term hedge arrangement perhaps. I am saying that if a lines company is facing many thousands of dollars of annual maintenance and can offset that by providing an alternative supply one would think that some of the savings they might make would be passed on by way of direct subsidy on energy cost to those end-of-line consumers. Not many would have expected us to take that position but I think it may in fact be the only reasonable way in which some of these consumers can be fairly dealt with. During the Committee stage this evening it will be very interesting for the Minister to give us a view on whether an amendment to put that provision would be supported by the Government.  
As I said the National Party supports this bill. We see it as the culmination of some 15 years—nearly 16 years—of discussion and it will give certainty to people on the end of those lines who have for some years now been asking what happens to them after 2013. It is clear that continuance of supply will be a requirement on those distribution companies. It is unclear and it is up for negotiation—and quite reasonably so I think—what the generation source will be for the supplied electricity. So we look forward to the Committee stage of this bill and subject to that very important question being answered our support is likely to continue through to the third reading.