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Electricity Market—Performance

Wednesday 9 December 2009 Hansard source (external site)

Shanks5. KATRINA SHANKS (National) Link to this
to the Minister of Energy and Resources

What is the Government doing to improve the performance of the electricity market?

BrownleeHon GERRY BROWNLEE (Minister of Energy and Resources) Link to this

Today I announced a package of measures to improve the New Zealand electricity system. The changes will improve competition, may constrain price increases, should ensure effective and streamlined governance, and increase security of supply. The changes are contained in the Electricity Industry Bill, which will be introduced to the House tomorrow.

ShanksKatrina Shanks Link to this

What changes will improve competition and constrain price increases?

BrownleeHon GERRY BROWNLEE Link to this

I think it is important to note that no Government can promise to lower prices. What we can do is make sure that policy settings are as good as possible to constrain future price increases and promote competition and efficiency. The major changes that I have announced today include transferring the Tekapo A and Tekapo B power stations from Meridian Energy to Genesis Energy; Meridian Energy, Genesis Energy, and Mighty River Power undertaking long-term hedge contracts for supply; requiring the establishment of a liquid hedge market; allowing lines companies back into retailing; and establishing a special fund to promote customer switching.

GoffHon Phil Goff Link to this

Is the Minister actually telling the House that this is not going to lower power prices for hard-pressed New Zealand families; if so, why did National in Opposition promise continuously that that is what they were going to do?

BrownleeHon GERRY BROWNLEE Link to this

Well, that was the leader of a party—

SmithMr SPEAKER Link to this

I am on my feet. Now look, even though a member may not like a question, he must not start answering it by launching abuse at the questioner. The House knows it was the Leader of the Opposition who asked the question, and the House would appreciate an answer from the Minister.

BrownleeHon GERRY BROWNLEE Link to this

I withdraw and apologise for saying “was”. During the 9 years that Labour were in Government, electricity prices went up by 72 percent. During the same period there was a consumer price index price rise of 28 percent. That was utterly disgraceful. What we have done is put together a package of measures designed to constrain that price. I challenge the Leader of the Opposition to ever find a statement from me that said that a National Government would lower power prices. We in National think that the massive price rise we have had in the last 9 years is completely unacceptable, and we are doing something about it.

GoffHon Phil Goff Link to this

I raise a point of order, Mr Speaker. The question asked whether he could confirm that this actually would not lower power prices, and we have not heard the answer to that.

BrownleeHon GERRY BROWNLEE Link to this

The reality is, as the Leader of the Opposition knows, that the power price is set by retailers. All the Government can do is make sure that the environment for—[ Interruption] Do those members want an answer, or not? The way in which the industry operates does allow that competition. That is something Labour never did. Labour set up the Electricity Commission, which charged people every month, on their bills, and we simply saw the price continue to rise.

GoffHon Phil Goff Link to this

So is the Minister, therefore, confirming that hard-pressed New Zealand families, whose wages are being frozen on the order of the Minister of Finance, will continue to see their power prices go up, and that this is really just a sham—a bureaucratic and asset reshuffle?

BrownleeHon GERRY BROWNLEE Link to this

I hear no apology for the appalling performance of the Labour Government over 9 years, in this regard. I will—

GoffHon Phil Goff Link to this

I raise a point of order, Mr Speaker. It was obvious to you, from the beginning of that answer that the Minister was making no effort to answer the question, but simply to rattle on and bluster.

SmithMr SPEAKER Link to this

What I intend doing is allowing the honourable Leader of the Opposition to ask his question again. I ask him, though, to delete the last part of it. If he expects a reasonable answer from the Minister, he should delete the last part of the question he asked, and ask the question. Then I have a chance to have the Minister answer it. But with what the member added at the end of his question, it is hard for me to stop the Minister from firing back.

GoffHon Phil Goff Link to this

Is the Minister telling the House that hard-pressed New Zealand families, whose incomes are being frozen, will in fact continue to see their power prices go up, and that this is more about a bureaucratic and asset reshuffle than it is about reducing power prices to hard-pressed New Zealand families?

BrownleeHon GERRY BROWNLEE Link to this

If the Leader of the Opposition was in touch with the needs of ordinary families, he would know—

GoffHon Phil Goff Link to this

I raise a point of order, Mr Speaker. Again, it would have been obvious to you that that was not an effort to answer the question, but, rather, to give a speech.

SmithMr SPEAKER Link to this

I think the honourable Leader of the Opposition is making a fair point of order. He has asked a question, and once he cut out the innuendo at the end of his question, it was a fair question. In having the question answered, the questioner should not be attacked; that is unreasonable. I have no problem with there being some comment later on, but I would like to hear, at least at the start of an answer, something that tries to answer the question.

KeyHon John Key Link to this

I raise a point of order, Mr Speaker. With due respect, if Labour members do not want any barbs in the answers they receive, then I urge you to consider the rules of the House. Every time I am on my feet those people are yelling and screaming abuse. For 9 years, when the issue was on the other side of the coin, I remember abuse coming back at a much heavier rate. I think that if those members want to give it, then they should be able to take it. If they cannot, then we will have rules where there are none of those interjections, and that will be totally fine with those on this side of the House.

SmithMr SPEAKER Link to this

That is not helpful. I think the Prime Minister has made a perfectly fair point, and at times, as in the first question of the day, I have felt that the level of interjection was unreasonable. I did not intervene, because I felt that the honourable Prime Minister was coping with it pretty well. A degree of reasonableness is needed, but on this particular occasion after I asked the honourable Leader of the Opposition to remove from his question offensive words—words that were somewhat offensive—then I think it is reasonable for the Minister to at least attempt to answer the question. With the earlier version of the question I do not blame the Minister for launching back, but the honourable Leader of the Opposition appealed to me under a point of order. I have allowed him to repeat his question without the innuendo in it, and I think that a more reasonable answer is appropriate.

BrownleeHon GERRY BROWNLEE Link to this

I can say that the measures that are in this bill will mean that New Zealanders will not face power prices rising at three times the rate of inflation, as was the record of the years from 2000 to 2008.

ShanksKatrina Shanks Link to this

What changes will increase security of supply?

BrownleeHon GERRY BROWNLEE Link to this

We have announced a number of initiatives to increase security of supply, and also to reduce the supply risk in dry years. Most notable is the decision to require generators to compensate consumers if consumers are asked to save electricity through a national conservation campaign. Consumers will have the confidence of knowing that if they get that call, they will be getting some money back from those who are calling for those savings.

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