Electricity Industry Amendment Bill

on behalf of the Minister of Energy and Resources: I present a legislative statement on the Electricity Industry Amendment Bill.

💬 SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website. Can I ask all members leaving the Chamber to do so quietly and quickly. Thank you.

I move, That the Electricity Industry Amendment Bill be now read a third time.

This bill will implement a number of the recommendations from the 2019 Electricity Price Review. It will support the Government’s efforts to adopt the right regulatory and market settings for an electricity system that supports a low-carbon economy. The bill will promote competition and innovation in emerging distributed-energy markets, for example, by allowing the Electricity Authority to amend, extend, or revoke arm’s length requirements between distributers and affiliated businesses. It will reduce industry costs through enabling the Electricity Authority to regulate more standardised distribution access agreements and will protect the interests of small consumers through providing clearer powers for the Electricity Authority to regulate how retailers deal with medically dependent and vulnerable consumers such as for non-payment of their electricity bill.

The bill has four main purposes, which are to provide for the establishment of a small electricity consumer advocacy agency and enable the levy on industry participants to recover the Government’s costs relating to small electricity consumer advocacy, to remove ambiguity in relation to the ability of the Electricity Authority to amend the Electricity Industry Participation Code 2010—or the code—for the purpose of protecting household and small-business consumers, to provide more regulatory agility to promote competition in evolving contestable markets by shifting from the Act to the code a number of existing provisions relating to a distributor’s involvement in generation or retailing activities, and to ensure that the code can regulate distribution access terms and conditions, as it already does in relation to Transpower.

We’ve had robust scrutiny of this bill through the select committee, second reading, and during the committee of the whole House just yesterday. A number of clear focus points emerged in these debates, such as the small electricity consumer advocacy agency and the backstop power given to the Minister of Energy and Resources.

I will address the points raised in previous debates on these issues to help ease members’ concerns, but first I want to speak to the two amendments made to the bill yesterday through the Supplementary Order Paper tabled by the Government. The two amendments were to include a transition period for the Electricity Authority’s additional objective and to allow for remote attendance at annual meetings of beneficiaries of energy trusts.

Clause 9 of the bill inserts an additional objective for the Electricity Authority of protecting the interests of domestic consumers and small-business consumers in relation to the supply of electricity to those consumers. In order to allow sufficient time for the Electricity Authority to make the appropriate preparations for this change, including ensuring consistency between its current and new objectives, a four-month transition period has been added to the bill. Clause 9 is the only clause that is proposed to have a delayed commencement, with the remainder of the bill coming into force on the day after the date of Royal assent.

The other amendment addresses a lack of clarity in the existing legislation about whether annual meetings of beneficiaries of consumer trusts with shareholdings in distribution companies are allowed to be held virtually. This amendment inserts a new clause 32A, which amends section 102 of the Act, which sets out the procedures for annual meetings to appoint an auditor.

One of the focus points of previous debate on this bill has been the role of the small electricity consumer agency and the funding for this agency. The Electricity Price Review found that household and small-business electricity consumers struggle to make their voices heard and to exert influence over decisions affecting them in the electricity sector. Large industrial consumers, in contrast, have their own advocacy body, which provides evidence-based policy advocacy to regulators. This bill will help address this imbalance in bargaining power and representation in the decision-making process for households and for small businesses.

Another criticism that has been levelled against the small electricity consumer agency is that it will lead to increased consumer bills. The Electricity Price Review estimated that if the agency had a budget of $2 million, this would be a small increase of less than $2 per year on consumer electricity bills if the Government decided to recover the agency’s costs. The bill does contain a provision to enable either a portion of or all of the costs of the agency to be recoverable from the industry levy, but there is no plan at this time to amend the levy regulations to recover the agency’s costs incurred to date. Funding for small-consumer advocacy is being provided from Budget 2020. It’s not being funded through consumer bills.

Another focus point of debate on this bill has been the time-limited backstop power given to the Minister of Energy and Resources through this bill. The concern is that this power will give any Minister of Energy and Resources unrestricted ability to act as if they were the Electricity Authority. This is not the case. The bill grants the Minister power to amend the code for a small number of specified matters only if satisfactory progress has not been made on these matters. The specified matters were recommended by the Electricity Price Review as important matters requiring code amendment, and the Government agreed that they were priorities for the Electricity Authority to address. This power is time-limited and is actually being brought forward by one year to help lessen any regulatory uncertainty that may arise. I would also note that there is precedent for this approach as it reflects what was done with the establishment of the Electricity Authority under the National-led Government in 2010.

Finally, I wanted to highlight some of the other provisions included in this bill which will help ensure an effective regulatory framework for the electricity industry in view of rapidly evolving technologies and business models. Clause 9 of the bill gives the Electricity Authority the additional objective of protecting the interests of household and small-business consumers in their dealings with industry participants. Despite the reference to the benefit of consumers in the authority’s objective, there is uncertainty regarding the extent to which the code may include provisions to protect the interests of small consumers in their dealings with industry participants. Protecting small consumers is intended to be a relevant consideration for a relatively small portion of the Electricity Authority’s work. It is expected to come into play only when the Electricity Authority is considering the conduct of retailers and other participants that deal directly with small consumers where there is an imbalance of power in those dealings that can result in adverse outcomes for small consumers.

This bill will help enable more flexible and responsive regulations to help promote competition. The Electricity Price Review recommended that the Electricity Authority should be able to develop rules in the code, a secondary legislative instrument that can respond if distributors use their monopoly position deliberately or inadvertently to deter competitors from entering markets or to disadvantage those already in the market. This will help ensure that consumers can benefit from new products and services that offer high quality, lower cost, and more choice enabled by these emerging technologies and services.

The bill will move some provisions from Part 3 of the Act into the code. It will give the authority jurisdiction to develop proportionate and targeted rules to address any competition-related problems arising from the involvement of distributors or Transpower in other contestable markets, if they emerge. It is more appropriate that these statutory provisions are in the code because the rapidly evolving electricity system requires more flexible and responsive regulation than would be the case if the rules remained in primary legislation.

In closing, this bill will ensure the electricity regulatory system is more future fit in light of significant changes occurring in the industry. I commend the bill to the House.

The question is that the motion be agreed to.

Thank you very much, Mr Speaker. Well, it is a pleasure to speak on the Electricity Industry Amendment Bill.

We just did the committee of the whole House stage yesterday, so I’m going to cover quite a bit of the ground that we did yesterday, because we actually asked a lot of questions of the Minister and we got very little in the way of answers. We got quite a lot of hot air and quite a bit of snarky comments, but nothing in the way of substantive answers to our questions, so we still don’t really understand why this bill has been brought in. Some of the things are OK, but, actually, we can’t support this bill. I mean, it is quite outside of what the Ministry of Business, Innovation and Employment (MBIE) advised in some of the provisions, it’s outside good practice, and, most importantly, it won’t address the single issue that is the problem at the moment in the electricity sector, and that’s high electricity prices. It does nothing to address that problem at all.

I did note that the member Priyanca Radhakrishnan, who just took her seat, talked about the new Consumer Advocacy Council, and she said that it would be rebalancing bargaining power for small consumers against large industrials. Well, I’ve got some information that the Minister might be quite interested in: industrial electricity costs have increased from 2017 through to 2021 by 24.7 percent. Yesterday, I asked the Minister of Energy and Resources that question, and I’m sure my colleagues here will remember that question. The Minister alluded to it being 0.1 of a percent—that’s what she said. It was completely wrong. That was really an example of how the questioning went yesterday and how we didn’t get any information, really, despite trying to lead the Minister with enough information so that she could actually answer the questions, but she didn’t. Of course, she blustered on about something else.

💬 Penny Simmonds: She doesn’t listen to anyone’s information.

Well, that’s right—absolutely.

So why is that—why have industrial prices increased so much more? The rebalancing that the Labour member just mentioned in her speech is totally unnecessary, and it seems strange that we’d have another entity set up by the Government to try and do what, actually, the Commerce Commission does anyway. So we’re going to have another entity checking on another entity to see whether they can help people to rebalance when, actually, it is the large industrials that are paying more than anyone else, and their costs have gone up, quite simply, because they operate on the spot market—for very good reasons.

They may have hedging mechanisms and so on, which we don’t need to go into in this debate, but the reality is the sector has a sword of Damocles sort of hanging over the sector, and that is actually Lake Onslow—the Onslow pumped hydro scheme that the Minister referred to yesterday. That is actually having a hugely negative impact on the ability for the industry to decide whether to build more generation or not, because they don’t know what the impact of Onslow will be, or this pumped hydro scheme—a mega - Muldoon-like Think Big project which I thought New Zealand had moved on from. Admittedly, Rob Muldoon was a National Prime Minister, but I don’t support those projects. I don’t think anyone on this side of the House would support Government intervening in such a way.

As I said yesterday at the Wind Energy Conference, what gets built where is not a decision that should be made inside a Minister’s office. That is something that the industry itself should make. They are the people who are investing their capital. They know—

💬 Penny Simmonds: The Minister’s stifling innovation.

Well, that’s right, and it’s actually a shame that we’ve got to this. But the Minister has completely gone right off track and thinks that she is the font of knowledge sitting in her office and knows what should be built where—she knows how to operate the electricity sector. She has, in fact, given herself some power to actually go over top of the Electricity Authority. In fact, in the regulatory impact statement, it said that the Minister’s power to made code will temporarily duplicate that of the authority and does not conform with the practice of independent Crown entities—the Minister’s ability to regulate over the top of the authority is inconsistent with the independent Crown entities. MBIE have said, “Don’t do it.” The Minister said, “Yes, please, I want that power.”

The Electricity Authority is an independent body that knows what it’s doing. It’s got a huge staff that—well, not a huge staff, but very well-qualified staff. They’re very clever people in there. They know what to do, and yet the Minister thinks she’s got a better idea of how to manage that. I think that’s just outrageous.

💬 Penny Simmonds: She thinks she knows best. The Government knows best.

Yes—well, that’s what they believe, yeah. So having more bureaucrats isn’t actually going to help. Having the Minister coming in over the top isn’t going to help with electricity prices; in fact, it will create more uncertainty and less investment where it should be.

As I said yesterday, the Onslow project—and I just referred to this earlier—is like the sword of Damocles hanging over the industry. The problem is it’s going to take a long time to make a decision on this as well, and I’ve just looked up a couple of projects before I came down to the House. Switzerland has a pumped hydro scheme that they started building in 2008, and I’m sure that you’ll be shocked to learn that it’s only just opened now. Fourteen years it took to build—14 long years—and the cost overruns were enormous, and that is exactly what we’re facing here.

💬 Penny Simmonds: But Switzerland is generally efficient, not like this Government.

Well, that’s right. The Swiss are generally pretty efficient. It would take a lot of pocket knives, I guess.

Snowy 2.0 in Australia—that’s a really interesting scheme and a similar sort of pumped hydro scheme to here in New Zealand. Well, that was the brainchild of former Prime Minister Malcolm Turnbull, who announced the scheme in March of 2017. Now, that scheme was to be finished in 2021 at a cost of $2 billion with no taxpayer subsidy. They’ve come back looking for another $2 billion of taxpayer subsidy to help finish the scheme. The scheme will end up being $6 billion to build and then it’s $4 billion to upgrade the transmission system, so we’re talking $10 billion from $2 billion—five times the cost.

Everyone I’ve spoken to in the electricity sector—everyone who is an engineer, anyway; except for one person—has said that Onslow is not a good idea. It will have an unsettling effect while it’s still out there until a final decision has been made. We don’t know what it will do to the sector. It’s actually in the wrong place. It will take an upgrade of the high-voltage direct current line—the Cook Strait cable—and it will be at least another $1 billion on top of the $4 billion that they are projecting, but that’s actually not going to make it anyway. They all estimated it would be two to 2½ times more. So we’re talking probably $10 billion, plus the upgrade of the transmission. How is that going to help small electricity consumers? How is that going to help industrials?

Why am I concerned about industrials? Because we’ve got a cost of living crisis in New Zealand, with most of it down to Government policies. Yes, there’s some imported inflation, but mostly from their overreach in their expenditure, and industrial electricity prices lead to higher inflation, higher costs for families, higher costs for small businesses, higher electricity costs for everyone, and also higher consumer costs. This is a bad bill and we do not support it.

Thank you, Mr Speaker. On behalf of the Economic Development, Science and Innovation Committee, can I just firstly start by acknowledging all of the officials and the submitters who have worked with us in the passage of this bill.

It is really disappointing for me to sit here and listen to the Opposition not grasping the concept of competition. This bill is a bill that will finally increase competition in the electricity market, making sure that things like vertical integration in our market—which our select committee has actually just received a petition on—brings about competition which actually lowers the price in our electricity market. This bill has not come at the whim of the Minister or the ministry, but since 2018, we have conducted the Electricity Price Review, and this bill is a product of that Electricity Price Review, knowing that in parts of our electricity market we need the Electricity Authority to have better control.

There’s one particular aspect that I find really, really important that we have to implement in this bill, which is to create space for emerging technology, and I note in the bill that it especially alludes to solar energy. We know that right now, as the world keeps changing and as wars are fought over energy, for new technologies like solar, where it’s low in carbon and where it democratises our electricity industry, it’s extremely important for New Zealand to go forward.

Making sure that big monopolies don’t actually take over the whole, entire emerging solar industry is so important, and this is what this bill would do. It is to make sure that small consumers will get the better deal, at the end of the day, to make sure that New Zealand has a proper and competitive energy market. Therefore, I commend this bill to the House.

Thank you very much, Mr Speaker. I would start off by saying that the only monopoly that is actually taking over in this debate is the Government thinking that it knows best. That seems to be the line that this Government is continuing on, and I think people are waking up to that.

I mean, as soon as it became Government, it talked of declaring a climate emergency and they espoused a low-carbon economy, and yet what kind of result do we actually have? Since Labour took office, going back to even 2017, we have multimillion tonnes of bad and dirty coal being imported from Indonesia because we cannot generate our own. The whole thing is that they say, “Oh, it’s because we cannot control rain.” That is not the only reason; it is bad management. It is unbelievable, and it is actually decimating the gas exploration industry, killing off the Taranaki industry—I feel terribly sorry for the MP who is currently the sitting MP there.

So we absolutely oppose this bill. As my colleague Stuart Smith has carefully laid out, during the committee stage yesterday, we were rather appalled that the Minister could not answer a lot of the questions that we were posing, and often dismissed it by being sarcastic and even nasty in her commentary. I did actually give her some advice that perhaps she should be more collegial, and then perhaps the committee stage would actually work better and work properly, as it is supposed to, so that members asking questions will get answers—and that is the objective. But there were no answers forthcoming.

For example, one of the things the members have talked about was the establishment of the small electricity consumer agency. We asked what the purpose was, as we already have a very well-funded Commerce Commission who are in the business of acting for consumers. One of the things that I actually asked—I quote from my Hansard—and I quoted from the legislation where it says, in new section 22A(4) in clause 11, “In approving a person or persons under subsection (2), the Minister must be satisfied that the person has (or the persons collectively have) the ability to perform the function of the agency.”, and that’s a quote. That suggests that the Minister will appoint that person, and what is the criteria that that person must have? Does the Minister actually deem that that person or those persons are better qualified or better equipped than the Commerce Commission to act in this capacity in this new entity that the Minister wants to establish? The only thing that she said was that the Commerce Commission doesn’t do advocacy.

💬 Stuart Smith: Yeah, that’s what she said.

Mask! I’m translating it for you, Mr Speaker.

One of the things that she said was that it doesn’t do advocacy, so does that mean that this new entity is an advocacy group, effectively—like a union?

💬 Penny Simmonds: It’s Government-mandated.

A Government-mandated union, effectively. You know, I thought it was to protect the consumer so that we’re aiming to reduce the high electricity prices that consumers are paying, and this is just an organisation or group of people that’s going to be the mouthpiece for the Government. It’s typical of this Government to actually create new bureaucracy to do so.

The Government has been told by numerous agencies—and Stuart Smith, my colleague, has said that the Ministry for Business, Innovation and Employment, the leading Government officials who are actually advising on this, have, effectively, advised the Minister not to go ahead with this, and yet the Minister has decided to ignore that. That is often the case with this Government—the Government and the Minister seem to know best—and I was so frustrated that I even asked her if her PhD was in this field. I don’t think so, but if it was, then I would have said that, actually, maybe she knows best. But I don’t think her PhD is in this field. I would have thought that if one does not actually have the expertise in this field, one should take advice from officials whose job is to actually advise the Minister and who do, in fact, have the expertise, and yet the Minister would not actually take advice.

This is typical, as I said. This is the Government and the Minister—it’s an overreach. It’s actually a power-grab so that they can control the narrative and control—

💬 Penny Simmonds: Another power-grab.

Another power-grab, and the bit that I was completely skittled by was this particular bit in new section 44B, where “The Minister may amend the Code under this section as if the Minister were the Authority,”. I mean, I won’t read the rest of it, but, literally, the Minister can actually act like the authority and actually decide to change the code willy-nilly if she wanted. I thought there was a differential between Government entities, the Minister, and the advisers. I thought that was a role specific—

💬 Penny Simmonds: There used to be.

There used to be, but not any more, it seems. The Government and the Minister can actually take on the role, like the authority, and just change the regulation—just like that. This, to me, seems outrageous—that the Minister will actually take that power to do so.

When Stuart Smith talked about the ever-increasing prices that everyone is actually facing, one of the pieces of advice that the Minister would have got was that there are people in this country currently going through the cost of living crisis, and those vulnerable people—particularly pensioners, students, and people who are on a low income—will be in energy hardship. They’ll be making decisions, making a very, very difficult choice, whether to eat or provide power to their homes to heat up their homes.

This is a really, really sad indictment on this Government when they make it more expensive for consumers. It’s going to be tougher as we continue with this Government, who see fit to spend more money, with growing inflation and bad management.

I certainly do not support this bill. I think it is a terrible bill, and I do not commend the bill to the House.

Kia ora, Mr Speaker. I rise this afternoon as the MP for New Plymouth, which is a very popular spot, and before the last election, part of my campaign—and since being elected—has been around how do we, as Taranaki, continue to be the energy province for New Zealand. It really excites me because that is what we’re doing, but we’re looking at how to actually be the clean-energy province for all of Aotearoa and be world leaders, which is what we’re doing with initiatives such as Ara Ake and others that we’re doing to champion the causes of what a low-carbon future looks like.

This piece of legislation traversed many a topic. Obviously, one has been—and it has already been spoken about this afternoon—around strengthening the consumer voice. In fact, the Salvation Army submitted on this, and it talked about it from an energy hardship perspective that we wanted to do.

But also, coming back to my initial comments, it’s very much around addressing the need for more adaptive regulation to respond to new technology advances. I know that Colin Bell, who is a constituent from New Plymouth, submitted on it and spoke very strongly in favour of how we ensure that as technology changes, there aren’t just organisations or businesses who have the monopoly but there are opportunities to ensure that we have equitable and quality clean energy for our future. I commend this bill to the House.

Tēnā koe, Mr Speaker. Thank you. I’m pleased to take a call for the Green Party on the Electricity Industry Amendment Bill. It’s a good bill, but it doesn’t go far enough. But just going back to the 2018-19 review—Mr Speaker, could I ask you to ask other members in front of me not to talk loudly and interrupt? Thank you, they’ve stopped.

So, going back to what I was saying, this bill does implement a really important recommendation from the 2018-19 review by Miriam Dean QC and others, and that was that there be a consumer advocacy council established, because there was strong evidence to the review that consumers don’t feel that they are heard—they feel unseen and unheard—and they don’t feel that the regulators are listening to them.

In Aotearoa New Zealand, there is substantial energy poverty, largely because of our poor housing stock and low incomes, and that whole area is one which the Green Party, with the Warm Up New Zealand policy, our ideas towards insulating homes and the massive Government effort that is happening there, is helping to address. But as well as the energy poverty issue, we’ve seen major increase in electricity prices. As the review report noted, that electricity is not priced as fairly as it could be in Aotearoa. Particularly in the residential sector, prices have increased by 48 percent since 2000, and that’s faster than almost anywhere else in the OECD, even though our prices were starting from a slightly lower base than some countries.

It is for this reason that we really need this consumer advocacy organisation that the bill is establishing, so that we get, for the first time—because it’s certainly something that the National Government didn’t do when they were in office—a strong champion for the small-business sector and for residential consumers. Our current electricity sector is dominated by the big players, who act, often, in their interests and with a profit motive and don’t give enough attention to the impact of their decisions on residential households and small businesses. So that’s something that we strongly support—this agency—for small businesses and household consumers.

We also really support—though the previous National speaker, Melissa Lee, didn’t—the ability of the Minister to amend the electricity industry code to ensure that changes are made in the interests of households and small businesses if the sector isn’t doing enough. The Minister is accountable to Parliament and to the public, so it’s entirely appropriate that the Minister should have that power, rather than what National wants, which is laissez-faire, hands off, not getting involved, and just letting households have to cope with increasing prices.

We want more flexibility—and the bill does provide it—around new technology, because one of the things that we’ve awfully slow to do in Aotearoa New Zealand is enable the opportunities for distributor generation and also to encourage more households to take up solar panels. There are huge new subdivisions around Ōtautahi Christchurch, with very few solar panels being installed on those homes, partly because, again, past Governments did not focus on changing the building standards to actually make that a whole lot easier.

So these changes in this bill which will provide more flexibility around new technologies are really welcome. We still think, though, there could be much more fundamental changes in the electricity market, forcing “gen-tailers” to sell a proportion of the electricity that they generate on the open market, rather than just trading it internally within their retail arms, and there could be more transparency too, forcing the “gen-tailers” to release information about those internal transfers.

The bill is welcome in terms of as far as it goes, but we do need as well a proper strategy to deliver what is best for our climate in terms of the way the energy sector operates and the way the electricity sector operates so that we have that really good transition to renewables. There are actions in the emissions reduction plan, but that strategic look is something that we need as well. That transition to renewables—the National Party speakers previously have highlighted the continued use of coal at Huntly. That is happening because under National, there wasn’t that transition put in place and there wasn’t the focus. So we need that strategy; we need that transition.

The bill is a good one. It makes welcome improvements, and it is based on quite a comprehensive review, which made a number of the recommendations which then went through into the legislation. Kia ora.

Thank you, Mr Speaker. Well, the problem this bill tries to solve, according to the legislative statement, is to provide an effective regulatory framework for the electricity industry to evolve in view of rapidly evolving technology and the business models around supplying electricity from generators to consumers.

The bill does provide the simplest systems to be codified for electricity generators and distributors to come to their own arrangements, and I’ll give you an example of the current situation. When I worked as an engineer on a landfill, we generated 30 megawatts of electricity collected from landfill gas run through containerised generators, which was available to sell to the grid. What we would have preferred to have done was come to an arrangement with our neighbours who ran businesses, who could have used that electricity, but the regulations at the time—and the regulations still make it difficult—meant that it wasn’t possible to create a direct connect 14 ion between the generation from the landfill gas and our neighbours.

So this bill provides a much easier pathway for that to happen for generators—people who produce electricity—to supply their neighbours. Look, that’s a laudable outcome, and yet there are other provisions in this bill which are so egregious that the ACT Party will not be able to support this bill.

We supported the bill at the first reading. We had concerns that we raised. We signalled our concerns about the creation of a small-consumer advocacy agency at the second reading and at committee stage, and our concern around that is that the agency simply becomes a mouthpiece for Government policy.

In fact, our fears were confirmed just last week, when the head of that agency, who does wonderful work in her community and who appears to have now become a mouthpiece for Government electricity and energy policy, claimed that an intervention by the Electricity Authority in a proposed arrangement between an electricity generator—Meridian; and their customer, Rio Tinto, was somehow a good thing for consumers, as if people who specialise in human rights know much about the electricity industry. Yet that’s what this Government has offered us: supposed consumer advocacy agencies, unfortunately, masquerading for the purpose of delivering Government policy.

So the Government claims that a small-consumer advocacy agency would strengthen the consumer voice, particularly households and small businesses. It says they “struggle to make their voices heard and [to engage with and] exert influence over decisions [made in] the electricity sector.”, yet the committee heard evidence that consumers do make their voices heard: 400,000 consumers changed electricity provider in the last year. There’s more than 40 retailers to choose from, and 400,000 Kiwis decided to change provider. So if that doesn’t allow consumers to make their voices heard, what will?

Well, actually, there’s something else to support consumers, and that’s the utilities disputes tribunal. That’s a free service funded by the electricity and gas companies, which means that customers can raise a concern and they can actually claim damages, and the disputes tribunal will award damages of up to $50,000 or even $100,000. So there’s plenty of opportunity for consumers and small businesses who have a dispute with their electricity company to either switch service providers or take it to the disputes tribunal. ACT thinks that’s a great thing and it should continue.

Of course there’s no justification for a customer to have influence as to what a company that invests tens of millions, hundreds of millions, or billions of dollars in infrastructure does; that customer has other rights, though. They have the right to be fairly treated and to exercise their rights in terms of the Fair Trading Act, and under the Consumer Guarantees Act and other Acts.

Now, when we asked questions of the Minister yesterday during committee stage, it became apparent from the Minister’s response to questions about the Electricity Industry Participation Code and the fact that this bill gives the Minister the right to intervene and rewrite sections of the code directly—not the Electricity Authority, which currently administers the code, but to step over the authority and directly intervene in the code that regulates the interactions between the electricity generators and their customers. We suspect that the Minister is seeking these powers in order to achieve other Government policy objectives, whether they be social—of course there’s a cost of living crisis. What Government wouldn’t want to see energy prices go down? I mean, they might lose the election if energy prices stay up and Kiwis are still doing it tough a year from now—of course they’d like to intervene.

We also know that the Minister would very much like to see her policy around 100 percent renewable electricity to somehow be delivered, although it looks not just increasingly unlikely but exorbitantly expensive. It’s likely to cost tens or even twenties or even hundreds of billions of dollars; in fact, no one can tell the Minister, and the Minister can’t tell New Zealand, how much that wild aspiration for 100 percent renewables is likely to cost. So, of course, reducing greenhouse gas emissions, 100 percent renewable electricity—they can’t be achieved through any other policy means, and it’s unfortunate the Minister herself isn’t available to respond today, because she had a chance yesterday to make her case, and she wouldn’t.

What ACT believes is that Ministers should leave electricity generators and their customers alone, and leave them to come to their own arrangements about how electricity is generated and how they deal with their customers, some of whom use so much electricity, in fact, that entire regions, entire sectors—like Rio Tinto’s Tīwai Point Aluminium Smelter, which supports thousands of jobs in Southland—depend on security of supply, and if a Government is going to intervene, they need to think very, very seriously about the consequences and not just be focused on next year’s elections or the next opinion poll. The last time a Government tried to take direct control of and direct and influence the energy sector in this way was in the 1980s, when a former Prime Minister, the Rt Hon Robert Muldoon, ignored the advice of Treasury, ignored the advice of his own Ministers—some of whom went on to become founders of the ACT Party because they knew about good economics—and insisted that direct Government investment and involvement in electricity generation was the way to go.

Now, there’s a fantastic book that came out recently by a gentleman called John Boshier, who wrote this book Power Surge that details all of the terrible things that can happen to Governments, to economies, to communities, and to business when Governments insist on intervening directly in the energy sector and in electricity generation. In fact, John Boshier writes that when a Government takes a policy position in the market, there is a high risk of malinvestment, a waste of taxpayer funds—whether it’s a bike bridge over Auckland Harbour that proved to be unfeasible, or direct intervention such as building new mega-dams such as Onslow, which is not too different from the Clyde Dam, which went billions over budget and took years longer. I would advise the Labour Government members to read John Boshier’s Power Surge. It’ll be back at the Parliamentary Library soon—when I’ve finished, you can get it out.

Now, those policies that this Government is pursuing in the electricity and energy sectors make people in the private sector very nervous about making their own investments. You only have to look at the Concept Consulting report into the green investment and decarbonisation initiative—the GIDI Fund—which makes the Minister of Energy and Resources, Megan Woods, dizzy with excitement every time she announces it. But what the Concept Consulting report found was that four out of five projects are a boondoggle: nearly $600 million of taxpayer funds wasted by this Government on projects that the private sector would have delivered for itself. But when this Government comes along with backups of taxpayer money to give away, you’d be a fool to turn them down. But I can promise this Government and, unfortunately, all of those organisations which have got used to drinking at the trough, that if ACT’s in power, that’s going to stop.

Now, ACT stands up for consumers and taxpayers, and we believe the best way to ensure affordable energy and security of supply is to retain the current objectives of the Electricity Authority. The statutory objective of the authority is to “promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the … benefit of consumers.” It’s right there in the Electricity Authority’s objectives. That’s what this Government wants to change.

We’ve seen many examples where this Government has issued a dual mandate to regulators, such as the Reserve Bank. It’s turned out to be a disaster, and that has politicised the institutions that we depend on. If you want to have a healthy economy and if you want our communities to thrive, the last thing we need is this Labour Government intervening in markets, directing investment, and reaching over existing regulatory agencies to change things like codes of participation. That’s why ACT cannot support this bill.

Thank you, Mr Speaker, and thank you for the opportunity to rise and say a few words in support of this bill, the Electricity Industry Amendment Bill. Look, this is yet another way that this Government demonstrates that it’s looking out for people. One of the ways, one of the myriad of ways, that we do that, day in, day out, is something that hasn’t been mentioned so far in this debate, and it’s relevant to the New Zealanders that many of us will know and some of us will know well, and some of us will have as family members—as I do—where they’re people who depend on electricity in their homes for that critical medical support. As someone in that situation, I can tell you that the concept of the power not being on, or for something to go wrong in that direction, is something that people don’t need to needlessly think about, and this bill provides the authority with the clear power to make the code to prohibit retailers from disconnecting medically-dependent consumers for non-payment of electricity bills.

On the basis of that alone, I would commend that to the House, but, on top of that, at the heart of this it really is about strengthening consumer voice, as we’ve heard from several other colleagues—particularly households and small businesses who struggle to make their voice heard. Not to sort of gloss over the fact, but we have over half a million small businesses in New Zealand, and I think most of us would appreciate the fact that they don’t necessarily have time to make considerations about their electricity. It may be a small part of their outgoings, but they also don’t have any representation. It’s representation that they could do with, unlike the big players, who are represented by the Major Electricity Users Group and BusinessNZ Energy Council.

So, as with the two million residential consumers, we think that small to medium sized enterprises would absolutely benefit from an agency tasked with representing their interests. On those two points alone, I commend this bill to the House.

Thank you very much, Mr Speaker. It’s an absolute pleasure to rise and speak on the Electricity Industry Amendment Bill as the member of Parliament for North Shore and as member of Parliament, obviously, for the National Party. This piece of legislation is another example of a complete waste of time and of costs, bureaucracy, and regulation on hard-working Kiwis, and it is another piece of legislation that is a solution looking for a problem.

We had a chat yesterday—and, God, it was a bit of a painful process, I’ll be honest with you—at the committee stage. We were talking with the Minister and we were trying to actually work out, Minister, what is the problem you’re actually trying to fix with this legislation. It’s quite a simple question, I must say, and maybe I’m a simple man—maybe I was being a little bit too thoughtful.

But, I’ll tell you what, we just couldn’t quite get to the crux of what the problem is that we’re trying to look at here, because do you know what? One of the impacts of this legislation is this introduction of this consumer panel, which goes completely in contrast to the fact that the bill is meant to be ensuring we’ve got a competitive electricity sector. Well, as my good colleague Stuart Smith said, we’ve already got a hugely competitive electricity sector in New Zealand with 40 providers—a wide range—and I’ll tell you what: what did Consumer New Zealand say when they did a poll of Kiwis in terms of “How happy are you with your electricity providers?” Well, I’ll tell you what, 52 percent of Kiwis said they were very happy with the service from their provider. If you’re a lucky consumer—and I don’t want to get into the detail of who I use for my power, but I can tell you that Electric Kiwi was 70 percent satisfied; Flick, over 77 percent; or Powershop.

So let’s be clear: we’ve got competition. A lot of these big electricity providers have consumer panels, they have mechanisms to take complaints and feedback, but this Government, they don’t care about any of that—they don’t care. They just think, “Do you know what? Here’s another opportunity to put a bit more regulation into the system and a little bit more compliance.”, because what they don’t understand is that there is a cost to compliance, there is a cost to regulation, and guess who pays that cost! Well, I’ll give you a clue. I know it’s a Thursday afternoon and I know we’ve had a long week—gee, what a week it’s been. But I tell you what, the people that pay for all this regulation that that side of the House is ramming down people’s throats are the hard-working Kiwis out there across rural and provincial and urban New Zealand, who are doing it tough, with a squeezed middle, and they are the ones who are going to pay the price from this regulation.

I tell you what, as members may know, I’m reasonably good with numbers. I don’t often speak too highly of my skill set of being able to add one and one, but I’ve got my chartered accountancy and all that type of stuff. Now, we’ll leave it there, and we won’t—this is about the bill. But I asked a good question, and maybe I was being a little bit out of order when I asked this, but I said, “What’s the cost to fund this, Minister? What’s the cost of all this regulation and what’s going to be the impact on the power prices as a result of that?”, and do you know what the answer was?

💬 Hon Judith Collins: No. What was it?

There was no answer—there was no answer. There was no answer. Those guys on that side of the House are pumping through legislation like this and they haven’t even done their homework. They haven’t done their due diligence. They haven’t thought about the complications and the implications of legislation like this.

Not only do they not know what the problem is they’re trying to fix; they don’t know how much it’s going to cost. They don’t know what the implication is going to be on power prices for hard-working Kiwis, and what does that say for Kiwis out there that are looking for a little bit of hope from the Government in terms of leading them forward from where we are today to where they need to be?

Well, I can give you a bit of a clue that hope is on the way. Hope is on the way for Kiwis across this country, because next year a National-led Government is going to come in and start to unwind and rebuild this country and do what is required for this country to get us back on our feet—a prosperous and aspirational country looking forward to the future, and not putting silly, silly legislation like this through the system, which does no one any benefit. Lastly, I want to just thank the Ministry of Business, Innovation and Employment for their advice to the Minister to say that they thought this was a silly idea as well, because even they know that this piece of legislation is not fit for purpose.

I call Dan Rosewarne—five minutes.

Thank you, Mr Speaker. It is my pleasure to take this short call on the Electricity Industry Amendment Bill. This bill implements a number of recommendations from the 2019 Electricity Price Review to improve the electricity regulatory system and ensure that it’s more future-fit in light of the significant changes occurring in the industry.

This bill aims to improve fairness in the electricity sector, and the thing I like most about this bill is that it protects the consumer. In New Zealand, we have some consumers that depend on electricity in their homes for critical medical support, such that a loss of electricity may result in the loss of life or serious harm. This bill provides the Electricity Authority with clear powers to make code to prohibit retailers from disconnecting medically dependent consumers for non-payment of their electricity bill, and it’s for that one main reason that I commend this bill to the House. Thank you, Madam Speaker.

There’s a time to regulate and there’s a time to leave the market alone, and it depends on what the product is. Clearly, the other side of the House see electricity as simply a consumer product that doesn’t relate to life and death situations and to wellbeing. But for people like Folole Muliaga, who died in 2007 when her power was cut off—she died two hours after her power was cut off, because she was dependent on the oxygen supply that, in turn, was dependent on the power. That is not a fair situation, and that is an example of why regulation is needed in this market.

Yes, there needs to be an efficient market and, yes, the market needs to be fair, but there are consumers whose voices haven’t been heard. There are consumers who feel the impact of pricing in a different way than other consumers do, and that all needs to be tempered by a regulated market that ensures that all New Zealanders have access to the electricity that they need for life support or for medical reasons but also to be able to have meals on the table, for children to be able to do homework, and so on. So getting that balance right is a difficult task. What this bill seeks to do is strengthen the regulatory system so that those balancing decisions can be made in a fairer way so that the voices of consumers can be heard.

We’ve heard about those who are dependent on electricity in their homes for critical medical support, but the bill also seeks to strengthen the situations that we’re seeing increasingly caused through climate change, where there are natural disasters and emergencies where electricity might be required to stay on, regardless of somebody’s ability to be able to pay the bill there and then. Alongside strengthening the consumer voice, it’s also about clarifying the current ambiguity regarding the authority’s regulatory powers, and also adapting to technologies, as we have heard.

One of the issues that has been raised is around the Minister’s ability to intervene should a good regulatory code not be forthcoming. That’s entirely appropriate. There is the carrot of the industry being able to come up with a code that is suitable and appropriate, and there is the stick of the Minister being able to determine in her wisdom that that is not serving consumers. So the industry has every reason to want to get that code right in order to avoid that type of intervention.

Finally, addressing what Simon Court said about the change of providers, I wouldn’t normally mention a provider, but I’m sure that it is relevant here to be able to tautoko to Nau Mai Rā, which is a social enterprise power provider that is the only kaupapa Māori provider in New Zealand. That was started by Ezra Hirawani, who actually looked at power poverty, which is what we have been discussing on this side of the House today, and saw an opportunity to be able to take the surplus from power bills and redirect that into hardship grants for those who cannot afford electricity. So I imagine that Nau Mai Rā is one of the many providers that Kiwis will be changing to as they do make these choices around providing.

But, again, many people change providers because they are actually solicited to do so by the power companies. That doesn’t mean that they necessarily have the consumer voice that can feed into resolving the more complex issues about what pricing should be and how the sector should be running itself. So, for those reasons, I commend the bill to the House.

Thank you, Madam Speaker. Look, this is an interesting debate. I’ve heard the member Ingrid Leary, who’s just resumed her seat, who has talked a lot about electricity poverty and she’s talked about how people should be able to change their supplier. Well, they can. I mean—news break—they’ve been doing this for quite some time. In fact, I recall that it’s probably been for well over a decade that that’s been very easy for people to be able to do.

So, looking at this whole new regulatory authority that’s being set up—more regulation, more authorities—we already have the Electricity Authority, and I thought I’d just go and refresh my memory about the Electricity Authority. What do they say they do on their website? They say—and this is a direct quote—“[We] promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers.” So they’ve already got the job. They have 65 full-time employees and, having been their Minister, my view is that they were a very well - operating and functioning organisation and authority. So why do they need to have yet another authority to do what is actually their purpose of looking to the long-term benefit of consumers? It’s exactly what the authority already does. Instead of having some supposedly low-cost solution with, no doubt, low-paid people doing this job, which the Government seems to be considering, we’ve got these well-qualified, well-paid people—65 full-time employees—who are already in the Electricity Authority.

Then we take the many thousands of people working in the Ministry of Business, Innovation and Employment—MBIE—who have advised the Minister that “This is a really dumb idea. We don’t need to have it.” We all get power bills, and we look at them and think, “Oh, why didn’t we turn something off there?”, but there are also people who get power bills and they wonder how they’re supposed to pay them. Some of those people are in parts of the country where their power bills, or electricity bills, are more expensive than other parts, and a lot of that is around the cost of transmission, so one would think that there would be a commitment in this Government to encourage some generation in places where those transmission costs are more expensive.

I’m reminded of the Waitaha operation on the West Coast, which was trying to get to have an electricity supply, basically, under a waterfall with very little ecological impact—and, as I recall, even the Department of Conservation (DOC) was supportive of it—to provide electricity for 5,000 families or residences. This was in the West Coast of the South Island, a part of the country which does not actually have electricity independence and, as we know, is subject to all sorts of issues around earthquakes and weather events. So it makes sense to have something there for the West Coast, yet this Government, which is suddenly worrying about consumers—at extra cost and yet another authority, and at extra cost to those consumers—wouldn’t actually approve that. If DOC thought it was a good idea, out of all the agencies that we would think of, surely this Government would have thought it was a good idea too, but apparently not.

Then I cast my mind to another authority that already exists, and that is, in fact, the Commerce Commission. They are made up of eight branches already. These are competition, credit, fair trading, infrastructure regulation, legal services, market regulation, organisation performance, and strategy, governance, and engagement. That’s what they’re doing, and they are governed by a board of commissioners.

Now, the Electricity Authority has 65 full-time employees, and one might think that, well, perhaps they need a few more to do this role that the Government thinks it should be doing, which they’re already paid to do, and that is actually in their purpose statement. But let’s look at the Commerce Commission. Maybe they could help out, and how many staff do they have?

💬 Stuart Smith: A hundred?

Well, Stuart Smith, my colleague, says a hundred, and I’m telling him and the House they have 400—400—staff across their head office in Wellington and their office in Auckland. So, surely, they’ve got some capacity to do something if that’s needed. There is nothing from this Government, despite the hand-wringing and the talking about a very sad instance that happened under the last Labour Government of Helen Clark in 2007, to actually justify this new imposition of further regulation.

I heard the Minister yesterday, in a very sarcastic performance from her, which I thought went down like a lead balloon in Parliament—very sarcastic and lacking the basic understanding of her portfolio. It was really, really the sort of thing that one would expect from a Minister in charge of KiwiBuild. What she said was that, effectively, it’s only another $2, or something, a year for each household or each bill-payer. She talked a lot about industrial users of electricity, and, essentially, said that they should all pay more. That was, essentially, what we got from it—that that was what she was saying.

They already pay more—they pay more than anyone else. So what she’s saying is that we’ll just stick up the cost of living a bit more and make them pay more too so that we can afford to have yet another authority to say, “Gosh, electricity is quite expensive.” Well, renewable electricity is quite expensive, but we are very committed to a high rate of renewable electricity use. The reason is because it is better for the planet and better for our country, and, by the way, we already have a lot of the infrastructure in place.

But the problem is that most of that infrastructure is down the very bottom of the South Island, and we then lose a lot in the transmission to the North, and even to the West Coast of the South Island. So, clearly, it is actually quite an expensive form of electricity generation, although nobody in New Zealand now would want to go around talking about “Ban the dams!” and all the sorts of campaigns that the Values Party, as I recall, were running back in the days when these big hydro dams were being built. Yes, of course it sort of beggared the country, but another thing we’re seeing right now is big government thinking that Onslow, a big dam, or was it pumped hydro, is going to suddenly make a difference, and where have they put it—where do they want to put it? Well, they haven’t put it anywhere, of course, because the good thing with these things—

💬 Stuart Smith: Near Auckland, where there the demand is.

Does Stuart Smith, the MP for Kaikōura, think it might be near Auckland, where the demand is? Oh, no, no—definitely not. That would be down the bottom of the South Island again, Mr Smith, and the reason for that is that, clearly, we can afford to lose more electricity being transmitted up north, because the transmission itself loses a percentage of the electricity, up to 10 to 20 percent—depending on what’s going on.

We’ve talked about the cost of a new Cook Strait cable, and when I was the Minister, I asked about that. We’ve heard some different estimates on that cost. We’ve heard it was from $1 billion. I was told back in 2016 that it would be more like $3 billion to $4 billion, and, actually, there was obviously an idea that there might be a Labour Government that would have to sign that off.

The fact is that we need electricity generation and we need more of it in the places where it is needed, and not necessarily down the bottom of the South Island. At the same time, that Onslow project is actually stopping other people who want to be able to produce electricity from actually going through with their plants, and the reason is because they know that the Government is committing taxpayers and—for generations—those paying for it to this enormous, big project, which, thankfully, will never get done because it will not be happening under the National-led Government after the next election. It will not be and, by the way—this is one of those little things we can get rid of—I’ll be going through looking to see what is unnecessary and what needs to go. Thank you.

I have the privilege of being the last speaker on this bill, and so I wanted to speak about it, rather than other things. One of the things I wanted to come back to, because this is a debate, is this issue who this is for. This bill is for consumers. It’s for the middle—the squeezed middle is often the reference made. These are the people who need a break on their electricity bills. The bills have been too high for them and their voice has not been heard, so this bill helps that.

Miriam Dean is the QC who did the original review, and she recommended changes which meant that there would be a standardisation of terms. That was to increase competition, and this bill will do that.

In addition, there will be an advocacy body which will actually look after interests of those small consumers—an objective of the authority, which does the same. That’s a really important thing if we’re going to really address the cost of living for people, because energy is one of the great costs, and it’s the one that my neighbours cross the street to talk to me about. They want to see lower energy prices for the middle-income and lower-income people of this country, and I’m proud to say that this bill will do that. Thank you.