9. Hon Dr NICK SMITH (National—Nelson) Link to this
to the Minister of Energy
Does he agree with Electricity Commissioner David Close’s “fundamental reservations” over the way the commission approves investments in the national grid; if not, why not?
Hon DAVID PARKER (Minister of Energy) Link to this
The application of the grid investment test is a matter for the Electricity Commission. Differing opinions within the commission are matters that the commission itself addresses.
Hon Dr Nick Smith Link to this
Does the Minister consider it acceptable in an area so critical to New Zealand as security of supply of electricity to have the commission last month make a mistake of over 15 percent in the amount of electricity supply in respect of the min-zone, and this month to have one of its own commissioners state that he has fundamental reservations about grid investment decisions, and with these sorts of shenanigans why should we have any confidence that the commission will be able to keep the lights on?
The current grid investment test was approved after wide consultation with the industry. Nevertheless, it is true that the draft decision of Transpower on the proposed 400 kilovolts upgrade into Auckland is the first time that that grid investment test has been applied in practice to a major proposal. I would naturally expect there to be debate about whether the test has weaknesses. If it does, those weaknesses will be addressed.
Hon Jim AndertonHas the Minister received any reports on the accuracy of forecast by the leader of the National Party when he went down to examine the water storage in the lakes in the South Island and made some projections about what might happen to hydro generation in New Zealand?
Hon Steve Maharey
Madam SPEAKERI am sorry. Would the member please withdraw that comment. I had called for order. The member had hesitated, he had not started asking his question, there was no interjection, but there was loud muttering around the Chamber.
Rt Hon Winston Peters Link to this
I raise a point of order, Madam Speaker. You asked him to withdraw and you should ask him also to apologise. If you do not, he will carry on behaving in that way, and he has been doing it for far too long.
No, I ask the member—the member has a pattern of behaviour of questioning the Speaker’s rulings. I did ask him to withdraw that comment. I ask him again so we can now proceed.
Gerry BrownleeI raise a point of order, Madam Speaker. Dr Smith most certainly has withdrawn but the point he makes is valid. You have been very, very staunch in insisting that when questions are asked, they are asked in silence. By and large, we have made every effort to cooperate with that particular ruling. That was a deliberate interjection from Mr Maharey and I would have thought extremely difficult for anyone to miss. He knows that he has made that interjection. Maybe he should be required to apologise to the House for his behaviour as well. He is lucky he is staying here.
If in fact Mr Maharey had made that interjection when the member was asking his question, he would have been out, but the member had not started asking his question, which I would ask him to do at this moment, please.
Hon Dr Nick Smith Link to this
How does the Minister reconcile the statement by the Electricity Commission that its draft decision is “very robust” when one of its own commissioners has seen fit to publicly slam the decision-making process around transmission?
The commissioner concerned has not publicly slammed the commission’s decision; he has expressed a differing opinion. As I said in my answer to the primary question, differing opinions within the commission are matters the commission itself addresses.
Shane JonesIs the expression of a minority opinion in line with the purpose and function of the Electricity Commission?
Yes, indeed it is. One of the reasons for having independent commissioners is to enable a range of informed opinions to be considered in the decision-making process.
Hon Dr Nick Smith Link to this
Does the Minister accept that his Government is already taking unacceptable risks in respect of transmission to Auckland, noting the statement from the Electricity Commission last week that “security is not at preferred levels now”, and the statement of Dr Keith Turner, chief executive of Meridian Energy, that lines are so overworked into Auckland they cannot be taken out of service for maintenance, and that that is unheard of in the Western World? Do not those two statements show that this Government is already taking unacceptable risks with the transmission of power into Auckland?
No, they do not. The Government has long acknowledged that there is a need to upgrade power transmission capacity into Auckland. I would note that one of the problems we have had in New Zealand over recent years is that there was an assumption under the Bradford reforms that pricing signals would be given to Transpower in a way that would cause it to make an economically based decision, based on those pricing signals, as to when it should upgrade the grid. This Government rejected that model, and that is why we set up the Electricity Commission to do what it is doing.
Hon Dr Michael Cullen Link to this
Does the Minister take it from Dr Smith’s questions that the National Party is now supporting the 400-kilovolt upgrade of the North Island transmission line; if so, will he ask Dr Smith to convey that view to his colleagues, some of whom opposed that upgrade before the election?
Hon Dr Nick Smith Link to this
I raise a point of order, Madam Speaker. Based on your own rulings in recent weeks, the question by the Leader of the House is clearly out of order. I would be more than happy to answer it for him if it is the wish of the House.
Hon Dr Michael Cullen Link to this
I cannot see why the question is out of order. I have asked the Minister for his interpretation of the questions he is being asked and whether he will then be asking that member to engage in certain acts to clarify the confusion and division within the National Party on this issue.
The question is whether the Minister has responsibility for the actions of another party, and in this instance the answer is no.
Hon Dr Nick Smith Link to this
Why does his Government back the judgment of the Electricity Commission, a board with little engineering experience, over that of Transpower and Meridian Energy, which have a huge depth of engineering experience on security of transmission systems, when recent international history is littered with stories of major power failings in Queensland, north-east America, and Europe because Governments ignored the advice of transmission engineers?
As Minister Mallard commented when the draft decision was announced, the Government is keenly interested in ensuring that there is a consensus. The level of consensus, between parties that were recently some distance apart, is improving. The gap has narrowed, but we are concerned to see that the submission process, which ends on 9 June with the closing of submissions, further narrows that gap.
Hon Dr Michael Cullen Link to this
Is the Minister aware that the staunchest opposition to the 400-kilovolt upgrade came from Dr Smith’s bench mate Judith Collins; if so, will he be approaching Ms Collins and Dr Smith to encourage them to sort out their differences?
I am aware that some of the strident opposition to the 400-kilovolt upgrade came from National Party members.
Hon Dr Nick Smith Link to this
Does the Minister have confidence in the confusing structure his Government has created between the Electricity Commission, Transpower, and the Commerce Commission in respect of decisions about the management of the national grid; if so, why do the select committee, unanimously, the Government’s State-owned enterprise, and most players in the electricity industry say that the structure is a mess and is not adequate to keep the lights on?
I have confidence that the improvements that this Government has made to structures concerning investment decisions and transmission capacity have improved the situation. I do note that in a discussion paper the Government has put out, we signal that at some time in the future we think it will be wise to bring some of the functions of the Commerce Commission into the Electricity Commission.