5. Hon Dr NICK SMITH (National—Nelson) Link to this
to the Minister of Energy
Does he agree with the statements by Meridian Energy Chief Executive Keith Turner that electricity supply is “very tenuous” and: “This winter is the tightest we have ever had as a nation”, the statement by electricity industry consultant Bryan Leyland that “the risk of a severe shortage is quite high.”, and the supporting statements by Genesis Energy Chief Executive Murray Jackson; if not, why not?
Hon DAVID PARKER (Minister of Energy) Link to this
The Electricity Commission has a published set of assessment criteria that are intended to assure supply against a 1 in 60-year drought. I am advised that, based on those criteria, although lake levels are well below average the probability of a power shortage this winter is low.
Hon Dr Nick Smith Link to this
Noting that the Minister has effectively dismissed the views of Keith Turner and those of the chief executive of Meridian Energy, Murray Jackson, both of whom this morning at the Commerce Committee—
Hon Paul SwainI raise a point of order, Madam Speaker. It is a well-known practice in the House that one begins a questions with a question word, not “noting”.
Madam SPEAKERHon Dr Nick Smith Link to this
Is the Minister aware that the chief executives of Meridian Energy and Genesis Energy, the Government’s two biggest power companies, told a select committee this morning that they have no confidence in the Electricity Commission’s model and that lake levels are at the lowest level ever; why does he not face the reality that New Zealand is facing a severe electricity crisis?
It will not come as a surprise to the member to know that I do take an interest in lake levels. As a consequence, I spoke with Mr Turner about lake levels both before and after his comments yesterday. On both occasions he advised me that although he is concerned about lake levels, he considers that no additional action on the part of the Electricity Commission is needed at this point.
Hon Dr Nick Smith Link to this
How can the Minister say to the House that Keith Turner from Meridian Energy said that no further action was required, when both he and officials from Genesis Energy told the select committee this morning that the Government should fire up Whirinaki, a power plant that has been paid for by the consumers of New Zealand, and save water to ensure that we do not have a crisis this winter; why will the Minister not take that sound advice and do just that?
I am aware that Dr Turner today suggested that reserve generation at Whirinaki should be brought on at a lower price point, and it is a matter that I will consider.
Hon Dr Michael Cullen Link to this
Does the Minister recollect, in reference to the last question, that the National Party opposed the purchase of the Whirinaki power station by the Labour Government?
I most absolutely do. Were it not for the back-up facility at Whirinaki, the situation would be worse than it is.
Gordon CopelandWhat assurances will he give to our senior citizens and families on fixed incomes that an electricity shortage this winter will not lead to price spikes; and, if it does, how does he expect those on fixed incomes to find the extra money to pay the power bill—by going deeper into debt or by going cold?
If there were to be a power shortage this winter then we would expect that there would be a spike in power prices, but we would find that most residential consumers would be protected from that because they are not exposed to the spot market.
Hon Dr Nick Smith Link to this
How does the Minister reconcile his answer that Meridian Energy had told him yesterday that no action was required by the Government, with his answer to the next supplementary question in which he accepted that Meridian Energy does say that Whirinaki should now be fired up to save water?
Once again the member is confused. What I said in response to the first question was that Mr Turner advised me that no additional action was required on the part of the Electricity Commission at this stage, in his opinion.
Jill PettisIt is abundantly clear to most people that we have put up with National’s ham-fisted design of the energy sector for long enough. As the Prime Minister said late last year, as a consequence we are developing a National Energy Strategy that will address these issues, including issues of security of supply, energy efficiency, and renewable energy sources.
Hon Dr Nick Smith Link to this
Is the Minister aware that all of the last three electricity crises in New Zealand showed that the Government had responded too slowly to lake levels being low, and given that lake levels are now lower than they were in 2003, 2001, and 1993 for the same time of the year, why does he not now do something rather than sit on his hands waiting for the lights to go out?
The Government already has put in place both reserve generation and the Electricity Commission to develop models—
Reserve generation does come in. It has been used this year. The price point at which it comes in is 20c per kilowatt hour. Mr Turner suggested that that price point should be lower. Of course, National opposed altogether the provision of any reserve capacity.
Hon Dr Nick Smith Link to this
I seek the leave of the House to table the graphs on lake levels that show that New Zealand’s hydro storage is at the lowest level ever in New Zealand’s history in terms of securing electricity supply.
I seek leave to table the Electricity Commission assessment of lake levels against the minimum zone required to achieve security of electricity generation through winter.