Yesterday the National/ACT government pushed through the Electricity Industry Bill. It will do nothing to deal with rising power prices, fails to address issues around sustainability, and despite the rhetoric, doesn’t increase the security of supply. The evidential base for many of the changes the Bill imposes simply isn’t there.
The Treasury, the Ministry for Economic Development, and the Institute of Professional Engineers all raised concerns about the SOE ‘asset swap’ that will see the Tekapo A and B generators switched for Meridian to Genesis, thus breaking up the Waitaki hydro system. Treasury argued that the government hadn’t put together a business case to justify the swap, yet they went ahead and did it anyway. Given these are multi-million dollar state assets we’re talking about, that’s pretty concerning.
The Institute of Professional Engineers argued that splitting up the Waitaki hydro system could lead to water being used less efficiently given the competing generators would be encouraged to maximise their market position. They argued that no evidence had been presented to demonstrate that the benefits of the (small) increase in competition the swap is designed to create will outweigh the risks.
The government has also dodged some of the real issues. National claims to be committed to the goal of having 90 percent of our electricity generated from renewable sources by 2025, but they’re doing nothing to achieve that. It’s just more hollow rhetoric. In fact, Gerry Brownlee’s obsession with mining and mineral prospecting suggests they actually want to see less of a focus on renewables.
Then of course we come back to the biggie – power prices. Brownlee’s advice to those concerned about the increased cost of electricity is to switch companies. Does he really expect everyone to jot down their meter reading everyday and work out which company they should switch to? Perhaps if they set a common standard for smart electricity meters that might help consumers keep track of their electricity use and make it easier to switch, but they’re not even willing to do that.
The Electricity Industry Bill fails to address the big issues. It’s another case of National reverting to their 1990s ‘the market knows best’ mantra. Not surprising, therefore, that the loudest interjector in the House during the Third Reading of the Bill was Maurice Williamson. It was Williamson and Max Bradford who hacked up and partially privatised the electricity network in the first place, promising us that competition would lead to lower power prices – how did that work out in the end?