Smart Meters (Consumer Choice) Bill — First Reading 
Smart Meters (Consumer Choice) Bill — First Reading 
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Smart Meters (Consumer Choice) Bill 
First Reading 
DAVID CLENDON (Green) 
: 
 I move  
That the Smart Meters (Consumer Choice) Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Commerce Committee. The genesis of this bill is in part a response to a report published in June last year by the Parliamentary Commissioner for the Environment Dr Jan Wright entitled  
Smart electricity meters: How households and the environment can benefit 
. This bill would give effect to the recommendations of the commissioner. It would do that by ensuring that all meters have functionality enabling them to automatically control loads and talk to smart appliances and by requiring installers to give consumers the choice to have real-time information about their electricity use and variable tariffs so that they can make use of that function if they wish to. The bill would also ensure that a variety of tariffs is available to consumers. 
It is known that new meters are currently being installed in households as part of a replacement programme for very old equipment. The meters being installed through that programme are being described as smart. Although those meters are indeed capable of adding value by providing services useful to power companies they are not capable of delivering much of anything to consumers. This bill seeks to remedy that imbalance by ensuring that meters that are installed are genuinely smart and will provide choices and benefits to consumers as well as to the providers of electricity. 
The much less smart meters being rolled out now allow power companies to use them for remote meter reading. They avoid the need for meter readers to go into homes. That cuts costs for the companies but that saving may or may not be passed on to consumers. The meters also allow companies to data mine about the consumer’s user profile and consumption patterns and enable remote disconnection or reconnection of supply. Although those are useful benefits for the providers the same meters—the same hardware in effect—could be installed quite simply and cheaply with the capability to enable consumers to manage their power load to minimise cost on a differential or cost-reflective tariff. As well as saving households money which is one of the core features and intentions of this bill that would benefit the nation by making better use of installed energy-generating capacity by delaying the need for extra generation and by reducing carbon dioxide emissions from coal and gas stations because they would be required to run less often. The key difference between what is currently being rolled out and what we would like to see rolled out is the addition of a home area network capability enabling the functions that can deliver sustained demand reduction and reduce cost to the consumers through load shedding and load shifting. The cost of ensuring that meters have this capability when they are installed is very low. To retrofit them later as has been proposed by some would be much much more expensive. 
The Electricity Commission was charged with investigating whether the roll-out of advanced metering infrastructure—effectively smart meters—should be regulated and it came back with a recommendation that “it is not necessary to extensively regulate the roll-out …” of those meters as “the benefits of regulation do not outweigh the costs.” We have no quarrel with that part of the commission’s findings to the extent that the regulation proposed in this bill is deliberately very light-handed doing only enough to secure the necessary degree of standardisation and to ensure consumers are offered the opportunity to exploit the benefits of the technology. The Parliamentary Commissioner for the Environment in a briefing note signed by the heads of a number of consumer-owned and council-owned lines—or distribution—companies advocated for a somewhat more stringent approach to regulation. The companies saw the installation of smart meters as a significant building block towards a smart grid which is already an objective in Australia in many European countries and in parts of the US. 
The Electricity Commission notes that one of the primary drivers of smart meter installation nationally is to enable load management in particular allowing peak loads to be manipulated and levelled thus reducing the pressure on that critical peak-load capacity. The commission’s report notes also that “New Zealand has had an effective centralised load management system (the ripple control system) in place since the 1950s.” but goes on to concede that “the ability to enable more controllable load does make AMI systems attractive.”—considerably more attractive than the very old technology. The ripple control system we have is a very blunt instrument a one-trick pony and the new technology would allow for a much more comprehensive array of load management options. 
Clause 4 of the bill states: “The purpose of this Act is to empower domestic consumers to better manage their electricity use by requiring providers of smart meters to inform the domestic consumers of their options when upgrading to smart meters and setting minimum requirements for the provision of smart meters.” It is important to note that nothing in this bill obliges any consumer to adopt any of the new options. There is absolutely no obligation on consumers to accept or take on any extra cost; they simply must be given a choice. The cost to the company of offering that information at the time of installation would be negligible. 
One of the options a company would be required to offer to a customer is an in-home display—effectively a small screen inside the home that displays in real time the current tariff in cents per kilowatt the current rate of consumption and the current use for the day in consumed dollars and in kilowatt hours. It is a very simple read-out that can sit conveniently in the home. We know from experience that where these have been trialled in business premises and domestic situations such a real-time display works as a constant reminder to consumers of their consumption and is a prompt for them to turn off unnecessary non-essential consumption at that moment. The units are a really effective mechanism for initiating and embedding long-term behaviour changes in energy use and conservation. That will benefit the individual consumer and again will reduce demand particularly for peak generation. 
The bill requires retailers to offer to consumers the choice of a cost-reflective tariff an average-price tariff or a low fixed-charge tariff. Those who are currently on the low fixed-charge tariff will be able to stay on that tariff if that is their preference. It is entirely in a consumer’s hands. The cost-reflective tariff is a tariff where the customer pays a different rate according to the time of the day the units are consumed. Those types of tariffs can be designed to closely signal the network cost—the generation cost—of the electricity being consumed at any given time. The average-price tariff is simply a tariff where the consumer pays the same fixed rate for each unit of electricity consumed reflecting the average cost of generation across the 24-hour period. The low fixed-charge tariff is an average price offered to people who consume low amounts of electricity as defined in the regulations. That spread of options will allow householders to select the model that best provides for their needs whether they have large households with a relatively high demand—as with growing young families perhaps—or small low-user households such as with older couples who have lower needs and a lower demand for electricity. 
All we are seeking to do with this bill is to combine available well-proven technology with some options being offered to consumers to enable them to make intelligent choices and so reduce their costs. The bill is appropriately titled a consumer choice bill. It suggests we use the readily available technology. In that way we can reduce the need for add-in generation with all the social environmental and financial costs inevitably associated with that. I commend this bill to the House. 
AARON GILMORE (National) 
: 
 Members might remember the issue of VHS versus Beta in the 1980s. They might remember Microsoft’s Internet Explorer versus Netscape in the 1990s. They might remember the recent thing about the Sony Blu-ray Disc versus Toshiba in the 2000s. The issue of smart meters in the Smart Meters (Consumer Choice) Bill is a very similar situation. All aspects of technology that are common today have eventually become very well adopted. But in their time particularly in the early stages of technology like smart metering a lot of confusion existed about whether we had jumped to the right standard of technology. That is why National will not be supporting this bill. 
It has some good aspects; I must commend the member for bringing it to the House. I will touch on some aspects of the technology in the bill but I believe that the bill will compel New Zealand to make a choice today on a set of standards and technologies that is not quite there yet—an idea whose time has not yet come. I will touch on that. People have a lot of confusion about what a smart meter is. Recently in Canterbury Meridian Energy has been rolling out what are called by the Parliamentary Commissioner for the Environment “almost smart meters”. Some people call them smart meters; in other places they would not be called smart meters. It depends on people’s situations. In other countries particularly in Europe and even more particularly in Italy significant numbers of smart meters have been rolled out—tens of millions of them. But very different standards exist across the world. Recently in other parts of the world—like Germany the United Kingdom and Canada—we have seen the roll-out of smart meters. Nearly every single one of those countries has rolled out a different form of technology and a different set of standards and that is one of the issues National has with this bill. 
As the previous speaker David Clendon talked about we have seen that New Zealand was a world leader in what was called ripple control mechanisms. In fact in the 1950s and 1960s we were one of the first countries in the world to bring in ripple control. That mechanism allows consumers to control their hot water load and it was a very useful hot water load management system. New Zealanders have used that technology and sold it in many places. 
There is an issue with metering generally in New Zealand. Many of the ferrous iron - type meters that have been in place since the 1950s are coming to the end of their natural lives. That is why there has been some interesting debate about the issue of smart metering today. In Christchurch where I live Meridian Energy has made the call to put in place metering technology that will allow automatic meter reading. It will stop meter readers from having to go to consumers’ doors to read the meters on the wall. That is a good step. The technology for that is very well-developed and has been used very well across the US and in other parts of the world. We think that technology makes sense. 
A lot of work has been put into these issues of smart metering and particularly into the issue of how smart a metering device should be. I think we would all agree that in a perfect world we would have devices in our homes—for example for our fridge or freezer—that would monitor the electricity use and turn an appliance off and on to take into account the load that might exist. I think we will get there and that in our lifetime that will occur but we are not there yet. Having the ability to jump to put in the meters what is called a home area network chip would cost a significant amount today. I accept that the marginal cost today would be quite low relative to the expected benefits of that mechanism but the reality is that consumers cannot bear that cost. That chip might cost a consumer anywhere up to an additional $200 to install today but the benefit to that consumer of putting in place an in-house display on the meter in the case of that chip would be effectively zero. National does not feel that that is an appropriate thing to do at this time when people have been facing record price rises in electricity over the last few years. 
We believe that one of the things we have to think about is how we get this technology right to bring it through into the market. The Parliamentary Commissioner for the Environment wrote a report recently on metering. That report has been considered by the Electricity Commission and the Minister of Energy and Resources and some guidelines have been put in place around smart metering. I am pleased to say that there has been some success in the roll-out of some of those smart meters. Some would say that that is not enough but it is a start. Given what we have seen so far in the technology I think that it is a good start. 
I understand that there is some sort of fear over this issue and particularly over the home area network chip. I spoke at the start about the issue of VHS versus Beta Netscape versus Internet Explorer and Sony Blu-ray Disc versus Toshiba. In each of those cases there was a winner and a loser in the field of technology. If we make a decision to jump to one standard today when it is actually not clear whether that will be the dominant standard in the world we will end up incurring a whole lot of unnecessary costs for the consumer. It would cost a couple of hundred bucks extra for the consumer but that is basically a waste of money if the consumer has to spend that money again some time in the future. We do not think that that is the right thing to do. For example the meters that Meridian Energy has put in at Arc Innovations in Christchurch have allowed the situation where in the future home area network chips could be put in should that be the right technology to jump to. As that member has outlined in his bill it may end up being the right technology to jump to in the future but I think that idea has not yet been proven—it is not proven that it is the right place to go. 
A number of regulations exist currently about the guidelines on metering by the Electricity Commission. In fact a bill currently before the Finance and Expenditure Committee has been looking at a number of issues about electricity. This issue has arisen in passing. If the member had brought the bill before the House with some alterations particularly in terms of the home area network chips and other things about tariffs we might have been able to support it. 
I will touch on one example of the tariffs the member spoke about. Again in Canterbury the Orion New Zealand lines company has one of the most innovative sets of tariffs in the country. Up and down New Zealand there are currently something like 300 different types of electricity tariffs. The electricity reforms that the Minister of Energy and Resources is currently undertaking outline a series of regulations for the new Electricity Authority to formalise and make some changes in those tariffs in order to bring together a simplification. I think that that makes some sense. But we have to be very careful not to put in place what is effectively more compulsion in other tariff rates when it makes some sense to have some innovative tariff arrangements particularly in Canterbury with the use of irrigation. I know that the Green Party has some particular concerns about irrigation but tariff rates and the innovative tariff structures used by Orion actually help to reduce water use and power consumption. I think that is a good thing. 
It is true that smart meters have the potential to reduce peak demand. They have the potential to defer the need for more electricity generation in the future and to encourage people to change how they consume electricity through their appliances throughout their lifetimes. But there are smart meters and smart meters. As I outlined earlier the question is whether we jump now to what is probably the wrong conclusion or whether we wait and take into account a more cautious approach to implement an arrangement whereby we would have meters that are more appropriate for New Zealand. New appliances will come on to the market from developers such as Fisher and Paykel which is a world-leading developer of technology for appliances and they will be able to access a standard of communication between meters and their appliances. That will be a good thing but we are not there yet. I think this bill in outlining some way of jumping that decision before the technology is there is a move too far. 
Finally I reiterate the issue of costs. Some matters in this bill contain too much detail for a bill and are probably better taken into account in terms of regulation. They are better taken into account in the electricity reforms we are undertaking at the moment with the electricity legislation and I encourage the member to get involved in some of the final stages of those regulations and their development to make the current situation with the Electricity Commission and those guidelines more formalised. These reforms will take into account a big chunk of what this bill does but will not take into account the tariff restructuring the home area network chips and the in-home displays which we think are a cost too far. Thank you. 
CHARLES CHAUVEL (Labour) 
: 
 I would like to begin by congratulating David Clendon on bringing the Smart Meters (Consumer Choice) Bill successfully to the House. It must be a record in the annals of the proceedings of the House for a new member to have a bill drawn from the ballot as quickly as he has managed to do. 
Grant Robertson 
: Outrageous! 
CHARLES CHAUVEL 
: Yes the rest of us are very jealous of the success he has had. Labour will support this bill because we believe that New Zealanders ought to have more control at home over their power bills. Householders should have the opportunity to get a little more control over the cost of their electricity. Smart meters provide electricity users with the ability to monitor their power usage and therefore to begin to exercise that greater control that we think they should have. The previous speaker is quite right. There are issues that need to be resolved. But the question is one of the chicken and the egg. Does the country wait until the technology is perfect or do we give the technology a bit of a boost by specifying a standard now and helping the appliance manufacturers to know what they should be doing as the Victorian Government has done and roll out a proper series of appliances in the home that can connect to smart meters and start to give consumers the power we think they should have? 
There is a real problem at the moment as the previous speaker observed. There is no requirement at the moment for the smart meters that Meridian Energy and others are installing to have any home area network functionality. There is an excellent report on this issue from the Parliamentary Commissioner for the Environment the servant of the House in this area who has done meticulous research on the requirements that would be needed to make sure we could roll out smart meters in a way that provides choice to consumers. That is something we should take seriously. The Parliamentary Commissioner for the Environment has estimated that by 2012 retailers will have installed a total of 800000 meters in this country without home area network capability—the feature that makes them smart. Without having installed a home area network chip so that smart meters can communicate with other in-home appliances consumers simply will not be able to take advantage of using power when electricity is cheaper. 
The bill sets minimum standards for smart meters to ensure that the meters being installed are actually smart. They should live up to their name. They should have home area network functionality not just the capability to have them put in later on. As I said this will encourage appliance makers to move quickly to put chips in fridges washing machines dryers heat pumps and dishwashers so that householders can programme them to use power most efficiently and to lower their power bills. The corollary of this development would be that power retailers would offer differential tariffs. When they were not able to sell a whole lot of power into the market they could make that power available to householders say at night for cheaper rates. 
This is the future of electricity usage. It is an important step towards smart grids. Smart grids use digital technology to upgrade the current system and this will allow for much closer control of our electricity supply. 
The Government has shown a consistent lack of interest in providing consumers with greater control over their power usage and encouraging greater energy efficiency. Last year the Parliamentary Commissioner for the Environment recommended that the Minister should specify a standard as has now taken place in a number of overseas jurisdictions. I mentioned Victoria and that is probably the closest relevant development. But Gerry Brownlee has just ignored those recommendations. He defends his decision because he says that the ripple control system on home water heating to manage peak load is an adequate substitute. In technology terms Mr Brownlee’s decision is a bit like people saying they do not want an iPod because they still have a perfectly good collection of 78s. 
In March 2010 Gerry Brownlee again rejected calls to establish a standard for domestic smart metering of electricity in favour of allowing the industry to decide what is best. This refusal is a major missed opportunity to empower consumers. It is another example of the energy Minister just sticking his head in the sand. We can trot out all the excuses as to why we should not do this but we are missing opportunities. I congratulate David Clendon on bringing this bill to the House. I hope we take the opportunity he has offered to give consumers a bit of choice in the way they use electricity and to start making our electricity grid a lot smarter. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to speak on the Smart Meters (Consumer Choice) Bill introduced by my colleague the Green list MP David Clendon. I acknowledge his knowledge in this area. The Commerce Committee heard from the Parliamentary Commissioner for the Environment and various other submitters on this very subject. Obviously the bill’s aim is to give effect to some of the recommendations that the Parliamentary Commissioner for the Environment stated in her report. I must say up front that National will be voting against the first reading of this bill. “Advanced” meters I think is the proper term that should be applied to this because there are very few smart meters out there—not just in New Zealand but across the world. Smart meters communicate with appliances in a really advanced way. 
In terms of the development of the technology advanced meters have changed electricity meters into complex systems. These systems are able to measure and record electricity consumption in almost real time. It makes that information available to the electricity market its participants and most important its consumers. The benefits have already been espoused by previous speakers. Obviously it allows retailers to remotely read meters without needing to physically access consumers’ properties. It provides consumers with accurate monthly invoices not just guesstimates of what their bills will be. It also enables faster switching between retailers reducing the barrier to entry for new-entrant retailers. 
Smart meters have the potential to reduce peak demand thereby deferring the need for investment in new generation transmission and distribution assets. As all speakers have alluded to it could lead to cost savings for consumers retailers and distributors enabling greater consumer participation in and understanding of the electricity market. The recent ministerial review of electricity market performance led by the Hon Gerry Brownlee endorsed the introduction of smart meters in New Zealand because of the benefits they will bring. But the key point is that the Government supports the introduction of smart meters. 
In terms of the current regulation around smart meters some aspects of metering are regulated under Part D of the Electricity Governance Rules. The roll-out of smart meters is unregulated. However the Electricity Commission issued guidelines in May 2008 that recommended minimum standards for smart metering systems. These guidelines are recommendations only. The Electricity Commission of course reported to the Minister in December 2009 about the regulation of smart meters. The commission’s overall recommendation is that it is not necessary to extensively regulate the roll-out of smart meters because and this is the critical point the benefits of regulation do not outweigh the costs. Let me repeat that for the benefit of members opposite. The benefits of regulation do not outweigh the costs. The commission considered that some technical aspects of smart meters addressed only in the current voluntary guidelines should be regulated. Those regulations are being progressed as part of the fundamental review of the electricity market rules as my colleague has alluded to. 
Why should we not support this bill? Well some of the bill’s provisions are unnecessary because of widespread compliance with the voluntary guidelines on smart meters. There are technical matters contained in the bill that are inappropriate for primary legislation. They can instead be advanced through the rules made by the new Electricity Authority. The bill is also inconsistent with the expert advice of the Electricity Commission that we have all spoken about. It recommended against the extensive regulation of smart meters. Passing this bill would impose extra cost on consumers who are still reeling from the electricity price rises under the last Government. What were those price rises? I will remind the House. Prices rose at three times the rate of inflation—75 percent over 9 long years of the Labour Government. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 There we have it. National the party that purports to be the party of choice is denying consumers the choice to have lower power bills and to save money on their electricity. National purports to be the party of choice except when it comes to giving ordinary working New Zealanders any choice over saving money those members do not want a bar of it. At a time when prices are continuing to go up and we have low low rates of wage growth under this Government—the lowest in almost a decade—National does not want to give people the choice of saving money on their power bills. That is what this Smart Meters (Consumer Choice) Bill would do. It is a very good bill from our colleagues in the Green Party it is supported by the Parliamentary Commissioner for the Environment and the National Government is turning its back on it. 
Those members do not care about the evidence. They do not care about giving people choice. They want to take the Gerry Brownlee “we know best” approach and not give people the choice. National members do not care about energy efficiency at all. We saw that from the minute they took up the Treasury benches when they repealed the restriction on new thermal generation. They repealed laws on biofuels. They slashed the $1 billion home insulation fund that would have given so many New Zealanders the opportunity to save money on their power bills and to live in warmer drier homes. That all went out of the door as soon as National got into office and as soon as Gerry “Sexy Coal” Brownlee became the Minister of Energy and Resources. 
The ASSISTANT SPEAKER (Eric Roy) 
: Order! 
CHRIS HIPKINS 
: He does not want to reduce our use of energy because that would reduce the market for coal which he wants to go around pulling out of the ground to turn into electricity. Mr “Sexy Coal” Brownlee— 
The ASSISTANT SPEAKER (Eric Roy) 
: The member will use proper names. 
CHRIS HIPKINS 
: Gerry Brownlee wants to mine our national parks. Gerry Brownlee’s motto is “When in a hole keep digging”. He thinks that the future of New Zealand is not in energy efficiency and in giving consumers the ability to control their power bills but in digging up more fossil fuels and burning them to produce electricity. 
Members on this side of the House say that that is not a sustainable future for New Zealand. We need to look at more sustainable energy and electricity generation and we need to give consumers the ability to reduce their energy consumption should they wish to; to spread their energy consumption; or to make use of cheaper electricity. What is Gerry Brownlee’s answer to that? He says that we have ripple control. The 1970s solution to energy efficiency is good enough for Gerry Brownlee. As Charles Chauvel said it is a bit like saying that we do not want an iPod because we have a perfectly good set of LPs. 
The Government is not interested in the latest technology that can give people choice. The Government is going against all of the international evidence. In fact we can look at what the Conservatives in the United Kingdom are doing. David Cameron that great Conservative icon for the National Party stated: “We have got this big 1960s grid but it’s a dumb grid and we need to make it into an intelligent grid.” That was David Cameron. He said that a smart grid is “the equivalent of the internet rather than an old phone system.” That is the Conservative Party in the UK. 
The UK Conservatives who are not even in Government—at least not at the moment—are miles ahead of the National Government here which has had 18 months to do something to lower the price of electricity for consumers and it has done nothing. National members went up and down the country during the last election campaign promising people lower power bills. Where are they? The Government has had a year and a half. The price of electricity has not come down; it has continued to go up. Instead of lowering power prices the National Government is denying consumers the right to cut their power bills by being able to have smart meters. 
Thousands of new meters are being installed in households as we speak. Consumers are paying for the new meters already so the rhetoric from National that specifying a standard would load more costs on to consumers is not correct. Consumers are paying already. The meters are already being installed just not to a consistent standard so there is no guarantee that they will be compatible. There is no guarantee that the electricity companies installing the meters will not use them as a competitive advantage to stop consumers switching electricity companies. Specifying a standard would give consumers more choice. It would allow them to lower their power bills. This Government is denying people that choice. It is denying hard-working New Zealanders the chance to have lower power bills. 
JOHN BOSCAWEN (ACT) 
: 
 That was certainly an impassioned plea from Mr Chris Hipkins in this debate on the Smart Meters (Consumer Choice) Bill. It would seem that the debate has broken into one on the electricity industry the price of electricity and energy conservation. I will start by saying that the ACT Party will not be supporting this bill. 
Chris Hipkins 
: What a surprise! 
JOHN BOSCAWEN 
: Well we approach things with an open mind I tell Mr Hipkins but we are following the logic that Mr Gilmore outlined. He made the point that if we go back to the 1980s and 1990s we go back to the debate between VHS and Beta. We go back to the debate between Microsoft and Netscape. One could have taken a gamble and decided which type of technology to pursue but one would have made a mistake in doing that. I think Mr Gilmore has outlined very clearly that that would be a foolish thing to do at this stage. 
It was particularly interesting that Mr Sam Lotu-Iiga talked about the 75 percent increase in the price of electricity during the term of the previous Labour Government. He said that Labour is now crying crocodile tears over the National Government’s lack of support for this bill. I think it is very important to remind ourselves that there was a 75 percent increase in the price of electricity over the last 9 years. That is three times the rate of inflation. So what is this Government doing about it? It will increase the price of electricity even further. It will increase it even further because we have an emissions trading scheme starting on 1 July this year. It is being extended to the stationary energy sector which Treasury says will add 5 percent to the price of electricity. I know that Mr Hipkins is concerned about that because he is concerned about the price of electricity rising but he ignores the fact that his own party would have increased electricity prices by 10 percent if it had won the last election. 
The ACT Party and only the ACT Party questions the logic of having artificial increases in the price of electricity at all. Why would we proceed with an emissions trading scheme when none of our major trading partners is prepared to impose those same costs on their consumers businesses and exporters? I know that this issue is of concern to all New Zealanders and particularly to people living in rural areas. I have just finished a 2-day tour of the Waikato and Taranaki. I had seven public meetings and I was stunned by the response and by the number of people who wanted to come. 
Mr Clendon talked about the current roll-out of what he would call dumb meters. I understand Mr Clendon’s concerns because when the Parliamentary Commissioner for the Environment raised this issue with the Commerce Committee last year I also wondered at the wisdom of doing that. But I was persuaded by the arguments of Mr Gilmore and the National Government that to proceed when there is so much uncertainty as to the way the technology will go would be unwise. Mr Clendon said that the advantage of having the meters that are currently being installed is all one-way. The generators have an advantage because they will be able to read these meters to automatically calculate accurate power bills. I think that is an advantage for the consumer but Mr Clendon argued that the consumer will get no additional benefit. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. E te Whare tena tatau katoa. Katahi ano ahau ka hoki mai i te nehu o tetahi o nga uri o roto o Ngati Manawa ko Bill Bird tera. Koia tera i whakatakotohia ki roto i te rua koiwi o nga matua tupuna o roto o Ngati Manawa i Murupara. No reira e tika ana kia tuku i nga mihi nui ki a ia kua riro ki tua o te pae. No reira waiho ia kia moe kia okioki. 
Ko ta tatau ko te wananga i nga take o roto i te Whare Paremata i tenei po. Me korero au mo te ahuatanga ki a Murupara. I a au i Murupara i te rangi nei ehara i te mea he hangai tonu o ratau whakaaro i tenei rangi tonu nei ki tenei pire. Ko ta ratau i a tatau e korero nei mo tenei mea mo te hiko ko ta ratau e whakaaro nui nei mo te moni hei utu i nga nama. Ehara i te mea mo te mita ehara i te mea mo etahi atu take kao. Ko ta ratau ko te kimi moni kia taea ai e ratau te utu nga nama e pa ana ki te hiko. 
Ehara i te mea he nui waku korero mo tenei take. E ai ki nga korero kua puta ki te komiti whaiti o te Commerce Komiti i tae mai wetahi korero mo tenei kaupapa mo te smart meters. Kare au i te mohio mena i tetahi taha ko te smart meter ko tetahi taha ko te dumb meter aua hoki. Engari i tona mutunga mai e ai ki nga korero he kaupapa pai tenei hei awhina i te hunga e whakapau moni ana mo te hiko na runga i te mea tuatahi he ata titiro ki te moni ka whakapauhia i runga i te hiko a ka mutu tera pea na runga i tera ahuatanga ka kore ratau e tere whakapau moni i runga i te hiko ka mutu ka awhina i a ratou ki te ata tiaki i te putea kai roto i te pukoro. I tona mutunga mai te tumanako ia ka whakamama i te ahuatanga o tenei mea te hiko mo tena me tena o roto i nga hapori kia kore e raruraru na runga i te taumahatanga o nga pire kei runga i a ratau. 
He paku awangawanga no matau no roto i te Pati Maori ana ko tenei na. I nga tau kua hipa kua rongo matau a whakakikingia nga roto o Te Wai Pounamu mo te hiko a ka mutu ko nga kamupene nui ko ratau te hunga ka whiwhi painga na runga i tenei mea o te hoko hiko. Ka pataia te patai e mena koi ra te ahuatanga ko te nuinga o te moni ka haere tonu ki roto i te pukoro o nga kamupene nui he aha ta ratau ki te hapori ki a Aotearoa whanui tonu? Koi na te patai nui. He awangawanga tonu no roto o te Pati Maori i te mea mena ka pera e aroha atu ana ki te hunga e rongo nei i te poharatanga e rongo nei i nga uauatanga o te kore moni na runga i te kore mahi ka mutu a koi na te awangawanga nui. 
A kati ka tautoko ake i tenei pire. He poto noa ake taku korero engari he whakatakoto i enei korero ki mua i te aroaro o te Whare Paremata i tenei po. Kei wareware i a tatau ko te hunga rawa kore ko te hunga kore moni kore mahi nei i te mea tona mutunga mai ka riro ano ra ma ratau nga nama e utu. Mena he awhina tenei ki a ratau kia ata tiaki pai mai i te ahuatanga o te moni kei roto i te pukoro e tika ana kia tautoko ake. No reira ka waiho ake nga korero ki reira me te tautoko ake i tenei pire i tona panuitanga tuatahi. Kia ora tatau. 
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Greetings to you Mr Deputy Speaker and to us all the House. I have just returned from the burial of a descendant of the Ngati Manawa people. That person was Bill Bird and he was laid to rest in the cemetery of his Ngati Manawa ancestors in Murupara. Therefore it is apt that tributes of the highest order be placed upon the one who has passed beyond the horizon. Allow him to slumber and rest there.  
Our task is to debate the issues that are before the House of Parliament tonight. The thoughts of the people in Murupara today were as expected not focused on this bill. Their main concern as we debate the issue over power is about where the money is going to come from to pay the bills. It is not about meters or any other issue absolutely not but to find the money to pay the bills relating to electricity.  
I do not really have a lot to say about this issue. According to some reports from the Commerce Committee submissions about this policy relating to smart meters were received. I am not exactly sure whether the submissions were about smart meters or dumb meters or whatever. But at the end of it all and according to the discussions this is a sound policy in that it helps people who spend on power because in the first instance it monitors the money being spent on power and conserves the funds in the pocket. The desired outcome is that it eases costs to the individual and spreads it more evenly over the whole community.  
The Maori Party has a small concern and it relates to this. We heard that the ones who reaped the benefits by storing waters in South Island lakes and selling the electricity generated from that in the past were the huge power companies. The question then is if the majority of the money continues to go into the coffers of big power companies what is their contribution to the community and to New Zealand at large? That is the big question. It is a real concern for the Maori Party because if that is going to be the case we pity the ones struggling to keep above the breadline and struggling to find work. It is a huge concern.  
That aside we support this bill. While my contribution is a small one I have at least expressed it before the House. We must never forget those without means money and jobs because eventually they are the ones left to pay the accounts. If this bill is of some help to them in terms of stretching the money in the pocket then it is right that it be supported. So I leave my comments there and endorse this bill at its first reading. Greetings to us 
.] 
Dr KENNEDY GRAHAM (Green) 
: 
 I take pleasure in rising to support David Clendon’s Smart Meters (Consumer Choice) Bill. The purpose of the bill is to empower domestic consumers to better manage their electricity use. The mechanism to achieve that is twofold: first by requiring the providers of such meters to inform domestic consumers of their options when smart meters are about to be installed; and second to set minimum standards for the provision of smart meters. 
As the title of the bill indicates this is all about consumer choice. It must therefore be clear that this Government would be positively predisposed to support it. I note that earlier in this debate Sam Lotu-Iiga acknowledged that his Government supported the introduction of smart meters in themselves but alas not this bill. 
The Minister of Energy and Resources has expressed a concern that the bill imposes over-regulation on the industry. But the Parliamentary Commissioner for the Environment and the chief executives of six major lines companies have called for far more stringent regulations than are proposed in our bill. Under the bill one of the requirements for smart meters in this country is the provision of a home area network as has been acknowledged. This is a chip that can be installed inside the smart meter that would enable any electric or electronic device to communicate with the meter. The Minister along with the Electricity Commission recommends against proceeding with these chips. But if the bill is voted through to the select committee this issue can be explored. We could perhaps accept deletion of this provision although it is not easy to follow the logic of the argument against that. 
The basis of the cost-benefit analysis against such chips assessed by the New Zealand Institute of Economic Research was highly skewed against them in three ways: first it used retail prices for the costs and wholesale prices for the benefits; second it downplayed the electricity savings by 80 percent compared with the studies it quoted without giving any substantive reason besides suggesting that somehow New Zealand was different; and third it used the retail price for the home area network chip but in fact the chip comes pre-installed in the meter which makes a difference of $65 per unit. 
In the United States there is some public concern over the accuracy of smart meters resulting in calls for regulation. Our bill does not require regulation; it just gives the Minister the authority to regulate should that be needed. It has been argued that appliance manufacturers must move on a protocol first before smart meters do. I note that Aaron Gilmore earlier in the debate expressed concern about the different standards prevailing and concern about uncertainty over the precise technology that might apply in the future. Yet we understand from at least one major manufacturer that until the smart meter protocol is mandated they will not move to develop the interface. That is why other countries are mandating a protocol by way of regulation. Only this initiative will get things moving. Of course there may be problems of obsolescence down the line but the chip socket will still be in place so the chip can be upgraded at less than total cost. 
Does the Government truly believe that the cost-benefit analysis of the consumer aspects of smart meters will not pay? Does it believe that it will be 10 years before they are fully functional? If so the Government should introduce a moratorium on their installation. Otherwise the extra costs that retailers are charging to customers for smart meters that are of no use would be indefensible. 
This bill is about making New Zealand a smart economy. It is about using high tech to make us warmer more efficient and less polluting in our lifestyle. It gives the consumer the option of choice. The only thing standing between households and the absurd power price increases we are all facing is this bill. There can be no sound reason to oppose the bill. Any refinements that are warranted can be agreed to in the select committee. I call upon Government members to support the bill still at this stage and work with the Green Party to make it become law. 
KATRINA SHANKS (National) 
: 
 I rise to take a call tonight on the Smart Meters (Consumer Choice) Bill. National is voting against the first reading of this bill. We have heard a lot of talk about what smart meters are what they can do and how good they are. Smart meters are good and this Government supports their introduction. But we have to make a distinction between smart meters and advanced meters. In New Zealand we have advanced meters. Smart meters are an emerging type of technology that is still coming into the market still being commercialised and still being put into products that we can use. But in New Zealand we are not quite there. In fact it may not be wise to make regulations and pass legislation to make happen something that is not in existence now and that maybe will change significantly the way it is delivered or as technology changes. There might be a great big shift. If we are going to regulate and enforce something why do we not wait until we have smart meters in New Zealand and see what they look like? 
Although some aspects of metering are regulated under Part D of the Electricity Governance Rules the roll-out of smart meters is still unregulated. However the Electricity Commission issued guidelines in May 2008 that recommended minimum standards for smart meter systems. The guidelines are recommendations only; participants are not required to comply with them. But many many organisations already are gearing up to do so and many are already in that space without being told they have to do it and without having this legislation. 
What does the report say? The Electricity Commission report which is the most recent information we have was reported back to the Minister in December 2009. The commission’s overall recommendation was that it is not necessary to extensively regulate the roll-out of smart meters because the benefits of regulation do not outweigh the costs at this stage. The last thing this country needs is increased electricity prices. The last thing this country needs is another law put in place that will make the costs for those users go up even higher. Now is not the right time for a bill like this. 
What does the bill do? It requires providers of smart meters to offer to consumers before the installation service or upgrade of any domestic smart meter an in-home display unit import and export capability and the choice of particular types of prescribed tariffs. It sets out minimum requirements for smart meters such as that they must include certain components and features that accord with the Electricity Governance Rules the means to control any existing hot water cylinder various other features and crucially home area network functionality not just capability—and there is a difference there. The bill also introduces regulation-making powers for the purposes of assisting domestic consumers. This is already happening in certain areas without this legislation having been passed. 
Some of the reasons why the bill’s provisions are unnecessary are that there is widespread compliance. There are already voluntary guidelines on smart meters. The technical matters contained in the bill are inappropriate for primary legislation and can instead be advanced through rules made by the new electricity authority. Maybe there will be a time and a place for this legislation but the industry is already doing all right on its own. We do not need to interfere at this stage. Thank you. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 Poor value for money—that was the Treasury advice on the Government’s so-called jobs package last August. Do we have more jobs? No we have fewer jobs and 168000 people are unemployed. More jobs are disappearing offshore every day and the Government has refused to invest in jobs and skills. 
The fact is that this Government is not very smart but here we are talking today on a bill about smart meters that is intended to put the power back into the hands of consumers. The Smart Meters (Consumer Choice) Bill is timely and it should be supported. Unfortunately it will go nowhere because we have a Government that is stuck in mundane and bland thinking. It does not see its role as being to invest in skills and jobs let alone to promote new technologies to deliver new policy directions and transform our economy and society. I will talk about smart thinking something this Government does not do. I am deadly serious about it because if we do not do some smart thinking then we will stand still as an economy. 
The communications revolution means massive changes in the way that we live work and communicate which has an impact on health care education and environmental services. It requires collaboration between various industries such as utilities services the telecommunications companies and the information technology sector. I wish that I could stand here in this House today and say that is what is happening in this country but unfortunately it is not. 
Despite a big plan to put $1.5 billion into ultra-fast broadband this Government is doing very little thinking about what it will use that broadband for or about how it can drive demand and help transform our society to deliver better education health services and energy services through new technology. Instead that thinking is going on in Australia. Its smart thinking is being led from the top. The Rudd Government has made the connection between smart meters new technology and energy efficiency and the importance of having the Government drive change for the good of all society. 
In Australia a fundamental shift has taken place in environmental policy since 2007. That has had a huge effect on the utilities market. For the information and communications technology and the energy industries Government initiatives on smart meters and national fibre telecommunications networks are moving in new directions such as towards smart grids. By mid-2010 the outlines of Australia’s first smart grid project should become visible starting in Victoria. The major players are mostly large energy retailers and producers supported by information technology and telecommunications firms. 
The Australians grasp that smart meters should only be considered in the broader context of the modernisation of electricity networks that introduced sensing communications and information technology on to the grid. Reputable Australian telecommunications analyst Paul Budde has talked about trans-sector thinking. He has talked about how the Australian Government is leading on all infrastructure projects and on the potential synergies between the building of roads sewerage systems and water and gas pipe networks and telecommunications and electricity networks. The concept of smart communities is based on intelligent infrastructure such as broadband and smart grids. 
In this country one would hope that there would be smart thinking by our Government to go with the delivery of broadband and that the Government would think of putting broadband in place to make sure that people in communities are better connected with services that link their homes to broadband. What are we doing as a Government to make that happen? Well stuff-all as it happens. 
I sit on the Commerce Committee. Last year a stream of State-owned electricity companies came before the committee for their financial reviews: Meridian Energy Genesis Mighty River Power Transpower and the Electricity Commission. I asked every one of them the same question and I got virtually the same answer from each of them. That question was whether given that the efficient use of electricity and saving power is a key issue for our time any more work was being done on it and whether the organisation was doing any thinking about where we are going next. The answer consistently was: “Not much.” Then I asked whether they were aware of the work being undertaken in Australia and other countries on smart grids and whether they were doing any thinking about that. The answer was “Yes” to the first part of the question and “Um no” to the second part. I rest my case. No smart thinking is being promoted by this Government in the electricity industry. 
There is a huge opportunity to use this bill to propel thinking about how to better use smart meters. We could use new technologies to build smarter communities to save people on their fuel bills and to save energy. 
DAVID CLENDON (Green) 
: 
 Kia ora koutou. I will begin by thanking those members who have spoken in favour of the Smart Meters (Consumer Choice) Bill particularly the Labour and Maori Party spokespeople; that demonstrates the forward-thinking and progressive nature of those two parties. It must be said of some of the opposition comments that members have shown damned good “faint praise” in recognising that many of the benefits we are proposing for the installation of smart meters are in fact very real. Nevertheless they are choosing to vote against offering choice to consumers. 
There seems to be a strange phenomenon around electricity prices. In years when the hydro lakes are dry we are told the power price must go up but in years when they are full the power price must still go up. We bring in more renewables and electricity prices go up. When we fire up the old coal burning stations there seems to be some strange economic alchemy that demands that electricity prices must continue to rise. This bill would not be the entire solution to electricity pricing and to managing that but it would be one significant and very positive step towards giving consumers the ability to manage their usage and cut their costs. It is a great shame that the Government tonight is demonstrating its failure to protect householders from rising electricity prices by voting against this very sensible and very timely bill. It is ironic that the two political parties that pride themselves on being advocates for choice will be voting against a proposal that would enhance choice and offer consumers even more choice in this very critical area of energy in the household. 
Consumers are indeed paying for the new meters that are currently being rolled out so consumers are stuck with paying for a technology from which they cannot benefit. That to me seems to be at odds with at least the professed beliefs of the two parties that are so far opposing this bill. We have heard much objection that the legislation has come too soon and that we must not get ahead of the game in terms of putting the technology in place before it is certain. In fact that belies the reality. This is not new technology; it is well-proven technology. In fact it is mandated in Victoria the state of Australia and in parts of the United States. 
We are told that we must catch up with Australia. But suddenly the Government seems entirely reluctant to adopt the technology that is proving its worth in Australia and that has been adopted there for all the reasons we are proposing that it would be appropriate to adopt it here. For a Government that speaks a great deal about innovation and the advancement of New Zealand’s economy it seems to have a remarkable reluctance to innovate—not even to take a risk but simply to display some leadership—and to demonstrate a willingness to accept that time has moved on. 
I must thank Mr Chauvel for his very appropriate comments that this is the iPod generation. We no longer content ourselves with just 78 records but that is what this Government seems satisfied to do. There has been some mention of smart appliances. One spokesperson hoped that in his or her lifetime smart appliances would be seen. I am not putting words in the mouth of Fisher and Paykel Appliances; I am not suggesting that that company is coming out in support of this bill necessarily. But I spoke a few days ago to one of its technical people who assured me that technically in terms of electronic design and development it could have smart appliances on the market within 18 months. All the company requires is confidence and the surety of the standard. Essentially all it needs to light the fuse to make New Zealand - manufactured smart appliances available is an assurance of a standard. That is a very very slight—minor—regulatory step but that is what we see the Government unwilling to adopt tonight. Eighteen months is a very short time in the scheme of things and that is how long it would take—not 10 years not a lifetime. 
Overall the objections from the Government have been in effect quite niggling objections—that the bill is too soon and that the bill is imperfect. Of course it is imperfect; I doubt whether a member’s bill has ever come to this House that could not have been improved by appropriate attention from a select committee. It is very disappointing that this Government will not allow that process to proceed. What will come out of this debate though is that New Zealanders will note which parties were willing to stand up and support the best interests of consumers and which parties were not there to support consumers’ interests. Kia ora koutou. 
A party vote was called for on the question  
That the Smart Meters (Consumer Choice) Bill be now read a first time. 
Ayes 57 
New Zealand Labour 43; Green Party 9; Maori Party 5. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Motion not agreed to.