Auchinvole Chris: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Auchinvole Chris: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Volume:647;Page:15976] 
CHRIS AUCHINVOLE (National) 
: 
 I would like to congratulate you Madam Chair on your appointment as Assistant Speaker. I think it is the first opportunity I have had to speak during one of your sittings since your appointment. In company with my caucus colleagues I am sure it will be a pleasure working with you and I expect to enjoy your sense of correctness fairness good order and sense of humour. 
Transpower keeps New Zealand’s energy flowing. It takes bulk electricity from where it is generated by companies such as Meridian Energy and Mighty River Power to 35 lines companies and directly to 10 big users. Electricity is delivered whenever and wherever it is needed 24/7 through 11806 kilometres of high voltage transmission lines with 41195 towers and poles 173 substations and 1122 transformers. Transpower does not buy or sell electricity; it just ships it and owns the assets of the national grid. 
So what point in particular do we wish to raise on the performance and current operations for the Minister to respond to? There are a number. We could start with Pole 1. The Pole 1 high-voltage direct current electricity cable which links the North and South Island was shut down suddenly late last year after a report was commissioned by Transpower the Marsh report. The report found that there was a serious risk of catastrophic failure in the pole which would lead to mercury vapours and fires in the facility. The Government said it found out that Pole 1 was being shut down only the night before when the Minister got a phone call from the then chief executive officer. The pole is an ageing creaking piece of equipment that was built in the 1960s. It desperately needs replacing but Transpower has only just lodged an application with the Electricity Commission to build a replacement. Assuming that that is approved it is still likely to kick into service only at the quickest in 5 years’ time; it should have been replaced years ago. Pole 1 is currently in partial service running in one direction only because without it we could not get enough power between the islands. 
In relation to transmission generally I say to members that as New Zealand moves towards renewable generation of electricity the need for new and upgraded transmission will increase. New and renewable generation sites such as wind farms will increasingly be located in more remote places. With regard to negotiations with rural communities I say that Transpower has not had a happy recent history in its dealing with landowners. One of the prices of upgraded transmission capacity is increased use of private land which is frequently extremely valuable. Transpower has on some occasions not been willing to negotiate in good faith with local communities and has managed to attract the ire of those communities. This is not good. 
Hon Shane Jones 
: What about the public interest? 
CHRIS AUCHINVOLE 
: Is the Minister really going to interject while I am speaking? That is unusual but perhaps he does not know he is not supposed to do that. He will have his turn and I hope he will have a lot to say about these points. But he should wait because there is more. Good examples are the farmers in the Waikato where Transpower wants to put in new pylons to boost transmission to Auckland and the farmers who are on the new Roxburgh to Islington line in the South Island. 
Hon Clayton Cosgrove 
: Rigor mortis has set in. 
Bob Clarkson 
: Better than being a motormouth. 
CHRIS AUCHINVOLE 
: Indeed! 
Then there was the land lease deal. In 2003 Transpower set up a complex tax deal where the Wachovia bank in the US transferred ownership of the South Island grid to a company registered in the Cayman Islands and leased it back. This is very very serious and it should occupy the mind of the Minister because he is well exposed to and well familiar with financial transactions. Transpower says it retains the legal title to all transmission assets in the South Island. US newspapers reported in April that Wachovia had been hard hit by the financial crisis related to the mortgage market. It had to raise extra money its share prices plummeted to less than half they were at this time last year and it posted a first quarter loss of US$393 million. This raised fears in some quarters that the South Island grid was in danger. These are very serious issues and the Minister should respond and address each one. 
Transpower has a huge strategic responsibility and is regulated by the Commerce Commission and the Electricity Commission. The expectancy of the New Zealand public towards the results of Transpower is now tinged with considerable apprehension. Is it overly restricted? Is the Resource Management Act a problem? Is there a good fit between Transpower the Electricity Commission and the Commerce Commission? Standard and Poor’s consider that on an international comparison we are negatively regulated. 
Report noted.