Parker David: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
Parker David: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
[Volume:651;Page:945] 
Hon DAVID PARKER (Labour) 
: 
 Part 2 amends the principal legislation by removing the inquiry powers of the Electricity Commission. I will discuss those inquiry powers and describe to the Committee how those powers currently work under the existing legislation and why it is important that they not be repealed. One reason I want to explore this is that when the existing legislation was passed one of the principal objections raised in the debate by National Party members was that essentially the decision as to whether an exemption should be given from the restrictions was a ministerial discretion which effectively enabled the future shape of the electricity market to be determined by ministerial fiat. That was never the case and it is interesting that in this debate National members are no longer using that justification; they have moved to different grounds. I make that point because it shows that the underlying purpose now is political not principled. 
The existing legislation states that the Minister of Energy can grant exemptions in a number of categories and that it is for the Electricity Commission to do an inquiry on an application by someone who wants to come within the ambit of one of those exemptions in order to see whether the exemption should be granted. The commission then makes a recommendation to the Minister of Energy and the Minister has the authority to do only one of two things: the Minister can either accept the recommendation or reject the recommendation. The Minister of Energy cannot replace the recommendation of the commission with some different decision. The Minister cannot replace the recommendation with his or her own decision but can accept or reject the recommendation. 
The exceptions that are allowed for under the legislation which the Electricity Commission has the duty to consider are set out in section 62G in Part 6A of the Electricity Act. The first is that the Minister of Energy can grant an exemption—again on the recommendation of the Electricity Commission—if the specified generation plant will be non-baseload plant that will have an average load factor less than a prescribed limit will emit greenhouse gases less than a prescribed limit or will have a start-up time of less than a prescribed limit. 
The second exemption is where there is a combination of renewable or other non - fossil-fuelled plant together with fossil fuels. That cogeneration process can be a sensible way to generate electricity. 
The third exemption is one that I have mentioned in previous contributions in response to the National Government’s assertion that the country could not build new more efficient thermal plant to retire less efficient coal plant for example. That category exemption is found in section 62G(1)(e). It states that the specified generation plant that could be allowed will be connected and operated in circumstances where an existing thermal electricity generation plant will be retired in whole or in part and that the specified generation plant together with any part of the existing thermal electricity generation plant that is not retired will be operated in a manner that will reduce greenhouse gas emissions by at least 20 percent based on emissions of the existing thermal electricity generation plant and the projected emissions assessed in the prescribed manner. It also requires the Electricity Commission not to reduce the security of supply. 
So what would happen in practice under the legislation as it stands will not be able to happen if Part 2 of this bill passes in its current form—that is the Electricity Commission will lose its ability to make that inquiry. If as National members say they are concerned about being able to replace inefficient thermal plant with efficient thermal plant then the Electricity Commission is the body that would listen to those applications and it would have the expertise to assess the security requirements of the system. For example we do not want to lose the whole of the Huntly power station to some interruptible gas-peaking plant because that would not be good for the security of supply but we might be willing to have that replaced by a more fuel-efficient gas plant that has lower emissions than a gas-fired plant. It would be for the Electricity Commission—