Parker David: Urgent Debates — Power Outage—Upper North Island 
Parker David: Urgent Debates — Power Outage—Upper North Island 
[Volume:631;Page:3485] 
Hon DAVID PARKER (Minister of Energy) 
: 
 I will just respond to one point that Mr Hide made. I did not disagree with Mr Turner’s comments; I disagreed with Dr Smith’s characterisation of them. Turning to the issues today what happened yesterday has been well traversed in this debate. An earth wire broke and flipped on to the Otahuhu substation. The question the Government is asking is why the wider system could not cope with that line failure. There is another question as to whether the line was properly maintained and I am sure that will be answered in due course but the more important question is why the system did not cope with that line failure. 
I will say another thing about that. One of the first questions on this issue that was put to me in this House was whether I recognise that it is my responsibility and the Government’s responsibility to keep the lights on. The answer is yes. I have made those comments previously and I made them again today. That is to be contrasted with the position taken by Mr Williamson some minutes ago. Even now after all of the events years ago when we had a 5-week power outage in Auckland he denies there was any Government responsibility for that event. We do take responsibility for righting what has happened. 
What have we done? First of all I have required a report to be with me within 2 weeks from Transpower as to its analysis of what went wrong and particularly as to why the wider system did not cope with the consequences of yesterday’s line failure. I have already made it clear that I am engaging another expert probably an international expert to provide me with expert advice on that. After taking that advice remedial action will be taken promptly. 
What are the likely avenues that we will explore? It does concern me that we are overly reliant on the Otahuhu site. Transpower already had plans to separate some of the facilities on that site. The  
New Zealand Herald  
today reported me as saying that would be done after 2012. There has been a bit of a misunderstanding between myself and the journalist. What I intended to impart was the reality that already Transpower plans to separate some of those facilities by 2012. The question I am asking is twofold: firstly should that be done sooner and secondly should we have a separate substation from Otahuhu in order to further give us greater capacity to survive events like this one? 
I want to turn more generally to the condition of our infrastructure. Before National took the reins in the 1990s transmission was planned in advance to keep ahead of demand growth. Staged investments were made. They were expensive but they stood us in good stead for many many years. But in the 1990s what changed was that National restructured Transpower. National appointed its own board and pursued an ideological agenda that it could not achieve in the reform of producer co-ops where the farmers fought back but it could achieve in respect of Government-controlled entities. It said that the market would give us pricing signals that would tell us if and when we should invest more in transmission capacity. 
Of course history shows that that model was just bollocks. What National planned to do then really beggars belief. What it was trying to say was that the market would deliver and that there was no need to plan. Of course the market did not deliver; all it delivered was inadequate investment. That was not just on the transmission front but also in roading in public transport and in every area of infrastructure that one can find including telecommunications. We have been left with that legacy. 
What have we done to remedy that legacy? This year in and around Auckland alone we are spending $83 million. In the coming year $300 million will be spent on capital works over and above maintenance. What were we left with when we inherited the system from National? About $50 million per annum was being spent. It was completely inadequate. National now cries crocodile tears. Perhaps the even greater fault of those years was not the amount that was spent; it was the fact that National was not even planning to spend more. It did not know what needed to be done and when it needed to be done. Labour has stepped in and it is spending money on critical infrastructure. As I have said five or six times more is being spent on transmission lines each year than National spent—a billion dollars or more over the next 3 years. It may not be enough. If it is not enough we will spend more but that will not be because we have some ridiculous view of the market giving pricing signals as to when and where extra money should be spent on the grid. 
Dr Smith said there were three problems that the Government should remedy. He said firstly there should be more investment in electricity generation. That is interesting is it not? He was a member of the National Government that with Mr Bradford as the Minister took those decisions from the Government and said they were for the market to make. It is interesting that Dr Smith says today that we are not getting enough new electricity generation. Obviously the market model that he foisted upon us has failed if he is right in that assertion. 
Secondly Dr Smith says that the Resource Management Act is the problem. He quoted those references in the Transpower reports. Dr Smith overstates the Resource Management Act problem. The problem was that no money was being spent and there was no planning for money to be spent. There were some imperfections in the Resource Management Act. We have eased the call-in procedures so that where there are projects that go across territorial authority boundaries there is now a legislative vehicle that enables the likes of Transpower or someone else who wants to put in important infrastructure to come to the Government and say that those matters should be called in. That step has not yet been taken in respect of the Waikato project that is proposed in order to lead more power into Auckland or indeed any other substation projects but it may be. If such an application is made to us and we think it is appropriate we now have the tools to enable that to happen.  
Thirdly Dr Smith says that the Electricity Commission is the problem. The OECD organisation the International Energy Agency has exactly the opposite view to Dr Smith’s and it is right. I will read from its report this year which came out a month ago: “The establishment of the Electricity Commission … provides much needed regulatory oversight to industries that had previously been left to self-regulation.” I do not need to say anything more than that to demolish that point.  
It is true that what happened in Auckland yesterday should not have happened. It is true that it is the responsibility of the Government to remedy it and the Government will. Thank you.