Electricity and Gas Industries Bill

The National Party strongly opposes this bill and agrees with the overwhelming view of submitters. They expressed almost unanimous concern at the design of the Electricity Commission, the rules around the Electricity Commission, and the fact that the Minister could ignore the Electricity Commission, if he so wished, and that the Minister could direct the commission, if he so wished. Despite the assurances that the committee received from Government members on the committee, who said: “No, no, no—the Minister would never do that. This is transparent. No Minister’s going to behave like that.”, before this bill is even passed into law, the Minister has gone behind the back of the commission. The Minister has gone around the back of the bike shed and is doing a deal to underwrite E3P generation with Genesis Power, the one State-owned enterprise that happens—by chance, I am sure—to have the president of the Labour Party, Mr Mike Williams, on its board. The Minister has not consulted with the commission at all, despite the fact that the commission was set up primarily for that purpose. As the commission has asked: “Why have us? What is the point?”. The Minister has replied: “Oh, well, gosh, you would not want this to be something that happened every day, but it just so happened with this State-owned enterprise, which has the Labour Party president on its board, and guess what? There is a guarantee that it is all secret.” How tidy is that?

💬 Brian Connell: It’s untidy.

Very untidy. How transparent is that?

💬 Simon Power: Not transparent at all.

It is not transparent at all. The Labour Party members sit there, and giggle and laugh away, but I say to them that the industry regards with huge—and I think quite rightful—scepticism the whole approach taken to the Electricity Commission, and that is why we will be opposing this bill.

Part 1 sets up the regulations around reserve energy and amends the legislation accordingly. We are opposed to that, and I will talk in detail about some of the clauses in that part, because subsequent parts of the bill are around the structure of the commission, which we will also want to talk about.

In Part 1 is the accountability section, which sets up the accountability of the Electricity Commission. We had a number of submissions on that part, the strongest of which came from a group of submitters that had commissioned LECG Ltd, an independent group in Wellington, to look at the structure of the commission and then tell us whether it would work. Dr Graham Scott, who presented the submission of the LECG group, said that the structure in Part 1 was a structure that he had seen before—in Albania.

💬 Brian Connell: What’s that got to do with New Zealand?

That has nothing to do with New Zealand, of course, and I do not know whether Dr Graham Scott was taking a liberty, but effectively he was saying that the structure is a shambles.

So I went and had a look and asked who was supporting Dr Graham Scott’s submission. I got a list of a whole range of lines companies and generators—major players, State-owned enterprises, Government-owned businesses—that said the structure is wrong, and that it does not and will not work. Every State-owned enterprise said that—even the State-owned enterprise that has the Labour Party president on its board. Even it said that the structure is wrong. We must ask ourselves why the Government is not listening.

There were some powerful submissions on the structure. I want to talk about the TrustPower submission. TrustPower was formed from a private company and a trust-owned company that merged into one. It is a unique body. The consumers of Tauranga City, like my parliamentary colleagues Tony Ryall and Mr Peter Brown, are shareholders in TrustPower. That company came to the Commerce Committee and said that it opposed the bill. It supported Graham Scott’s submission that said the structure was wrong. It said it was worried that the Government would use this bill in such a way as to stop reinvestment. Already we have seen that, with a sneaky little deal done by Genesis Energy. TrustPower said that this bill, if passed would force it to “put weight on and seriously consider exiting the New Zealand retail electricity market.”

Does any member of the Labour Party think that that is serious? Did any members of the Labour Party think that perhaps they should have talked to TrustPower after that submission was made, to see whether it was serious? Not one! Not one Labour member has gone to TrustPower, a company that has virtually every resident of Tauranga as a shareholder—some of them I think received their cheques in the last few weeks—to ask what would happen were TrustPower to exit the retail sector. Do any Labour members know what that would do to the market?

💬 Brian Connell: Do they care?

Do they even care? I suspect they do not. There are two large private investors in generation in this country—TrustPower and Contact Energy—and one is already saying that it would have to consider exiting the market if this legislation is passed. We see that the Government is looking to pass this legislation.

I thought that if things were as bad as that, what would the company on whose board the Labour Party president sits—he was appointed by Labour—think of the legislation? I looked at Genesis Energy’s submission. The first thing Genesis Energy said was that it supported Graham Scott. It supported his submission that said that the structure of this commission would be like something out of Albania. That is not very good. That does not sound as if the Labour Party president is backing his Minister. Genesis Energy thought that this bill should not proceed.

I wonder whether the Labour Party president has raised that in the Labour caucus, or whether it just stays in the boardroom of Genesis Energy. He is happy to raise the objection and take the money for being an appointed board member, but will not do anything to influence a Government that is destroying the industry with this legislation.

It goes on and on. Orion New Zealand opposes the bill. Transpower is totally opposed to the bill.

Progress reported.

The House adjourned at 5.56 p.m.