Electricity (Disconnection and Low FixedCharges) Amendment Bill

[The motion that the bill be read a first time was wrongly inserted and has been removed.]

When the debate on the Electricity (Disconnection and Low Fixed Charges) Amendment Bill was interrupted, I was beginning to speak about the first part, the disconnection provisions. The whole discussion on the issue of disconnection of electricity is a very timely one to have, for many reasons. The principal reason for the introduction of this bill, it would seem, is the tragic and untimely death of Mrs Muliaga, and we can understand the anxiety felt by other New Zealanders whose health issues mean they have to rely on electricity. Those same people will be wanting some assurance that the same fate will not befall them, should their electricity be disconnected.

But those people are not the only New Zealanders who worry about their electricity being disconnected or about the power going off. First of all, none of us likes being cold, and we do rely on electricity to keep ourselves warm. Secondly, some people rely on things like coal and wood. We know that under this Government those who rely on woodburners are feeling increasingly anxious. The reason is that the Government has proposed to adopt clean air standards by 2013, which will put significant pressure on many in my electorate in particular. I know that the people of Aoraki, after the very sudden disconnection of power for many thousands of them on 12 June, found themselves even more sure that they did not want to part with their woodburners. In some cases it was 23 days before the power came back on in Aoraki. So although the disconnection provisions might seek to tidy up where the Government believes there are some problems, they may seem a little shallow to those of us who face other legislative or regulatory requirements, in terms of turning our source of warmth to electricity only and not, in fact, being able to use our woodburners or coal fires also.

National realises that there are many reasons why we should be concerned about electricity generation into the future. In this respect, people will certainly find that a National Government will be willing to take some actions. Under National people will find that we will urgently—and we keep saying this—introduce a substantive amendment to the Resource Management Act. We will seek to amend that Act and do so as quickly as possible, because for many, many reasons that is urgently required by New Zealanders. We will also work with the electricity industry to develop a generating and transmission plan, because, you see, New Zealanders are worried that the lights will go out, not just because somebody turned them off but because there is not enough electricity generation to meet our ever-increasing needs.

We will also restructure the Electricity Commission, allow lines companies to enter into generation, and introduce transparency into billing so that consumers can see where the cost of electricity lies. We will also support the goals of the Energy Efficiency and Conservation Authority and work on practical measures to encourage more oil and gas exploration. With a Minister of Infrastructure under a National Government there will be the opportunity to oversee and help push through vital infrastructural development that will result in more generation of electricity in New Zealand. We will remove the barriers in the way of increased investment in electricity generation and transmission and in the way of oil and gas exploration.

The second part of this bill seeks to address low fixed-charge tariffs for people who are not using very much power. I want to tell members what the people of Aoraki said when they saw this reported in the paper. The first few words in the article in the newspaper included “scorn” and “disappointment”. Although the Minister of Energy, David Parker, had said low fixed-charges would be increased from 8,000 kilowatt hours to 9,000 kilowatt hours, the people of Aoraki very quickly got to grips with what that would actually mean in real dollar terms. For many it would mean a lessening of their power bills by—wait for it—$18 to $20. The man responsible for the Timaru Budget Advisory Service, Don Macfarlane, who is the coordinator of that service, put it very succinctly. He said: “Wow—that’s half a loaf of bread a week, if people buy the really cheap bread.” That really put it into perspective, did it not—$20 a year for these people?

We understand what it means for the people who are on low incomes, because over the last 5 years they have faced an increase in their residential power prices of up to 48 percent—48 percent! Industrial and commercial power prices have gone up by 25 percent over that time, but residential power prices have increased by up to 48 percent. It is therefore no wonder that my electorate office gets phone calls from constituents. Sometimes it is the constituents themselves who ring to say they cannot afford the power; the rest of the time it is people who ring on behalf of their neighbours or of elderly people who have discovered that the only way for them to survive the winter is to go to bed with their woolly socks on and a hot water bottle, and stay there. This is during the day; we are not talking about night time. These people are taking to their beds so they can survive the winter and the power price increases.

But it was not just Mr Macfarlane who had something to say about this change in the low fixed-charges for power. The president of Timaru Grey Power, Len Cummings, also said it was ridiculous. He said: “It’s not very much. I don’t know why they bother. It almost seems that they have a contempt for people.” Maybe the Minister thought this lessening of prices would be quite a good banner headline. But, in fact, the banner headline in the Timaru Herald was: “Govt chips at power bills”. That said it all. The Minister said that “a customer using 8,000 kWh each year in the lower South Island should be around $20 per annum better off”. So he knew how much or how little it was, but he still thought that this might get him a good banner headline. But wait, there is more! We then discovered that many people will be paying more for their power to allow South Island households to pay $20 per annum less.

Why do South Island households need this break? The reason, of course, is that they have to use a lot more power because it is a whole lot colder down there. Actually, we do not mind, because although it can get very, very cold we have beautiful sunny days after a hard frost. But, by golly, when temperatures are subzero we do need to heat our houses. TrustPower said it is very concerned about having to rejig power prices and about how much it will charge per unit, because, in reality, if it makes it cheaper for some consumers, then others will have to pay more.

So the bill is not the good news that New Zealanders thought it would be. The Government said that the intention is to make things safer for those people who have to rely on power, perhaps to keep themselves alive. But is this overkill? Do power companies not already have a responsibility to see that those people are protected? If that is the case, then this bill is unnecessary.

The National Party will support the bill going through to the select committee, because we think that is where these issues should be discussed. The bill is too little, too late for some, and certainly not enough for the people of Aoraki.

I want to take a brief call on behalf of United Future to discuss the Electricity (Disconnection and Low Fixed Charges) Amendment Bill. The speaker who has just resumed her seat queried, towards the end of her speech, whether this bill was overkill. I certainly do not think it is overkill, but I am lukewarm in my support for it, because mostly it merely provides for a new regulation-making power in certain areas.

If we look at the explanatory note, we see that the general policy statement states: “The purpose of this bill is to enhance the regulation-making powers in the Electricity Act 1992 in relation to the disconnection of electricity for domestic consumers; and the Low Fixed Charge … tariff options for domestic consumers.” So the bill, of itself, does not do anything; it merely makes possible, in certain circumstances, that certain steps might be taken. That is particularly so when we look at the provisions relating to what might happen with regard to disconnection procedures. It is very clear from reading the bill’s provisions in that regard—and I think it says so somewhere in the explanatory note—that this is really a measure of last resort. The capacity to make some regulations about how disconnections ought to be carried out in the interests of consumers’ protection would apply only if all other procedures had been tried and found wanting.

It is difficult to object to this bill on the face of it, because it appears to do so little under the guise of promising so much. In the wake of the recent unfortunate business relating to the Muliaga family, it is certainly clear that a number of procedures that have been applied over the years by electricity companies were somewhat less than adequate. I would have thought that the primary mechanism for ensuring that vulnerable and ill people are not switched off from electricity, as happened in the Muliaga case, is to have some connection between the district health board, as the provider of the health service to which such people are connected, and the power company, in order to make sure that when equipment is supplied that requires constant use of electricity that electricity is available to be used by the consumer. I would have thought that would be the area where we would want to make our prime intervention—to ensure that, in those cases where a respirator or some other form of equipment is supplied to a patient off-hospital site, the patient has access to electricity so that he or she can use the equipment.

It seems to me to going a little bit back to front to say that we are to put in place a regulation-making power that will enable, in certain circumstances, the development of regulations to require certain protections to be applied. That is useful to have as a back-up, but it cannot be the primary way in which we respond to these situations. I think that those who try to laud this bill as a giant step forward are somewhat deluded in that regard. It is a useful backstop measure, but it is no more than that; similarly, with the low fixed-charges proposal relating to the number of kilowatt-hours’ threshold for the low fixed-tariff options for South Island residents. As a South Islander by birth and by loyalty, even though I now live in this very temperate part of the lower North Island, I can recall, on rare occasions, those cold mornings that the previous speaker referred to. I can recall sometimes a wish that was expressed that maybe we should simply cut the cable and let the North Island sort out its own problems. So I can understand a measure of the member’s frustration about the increase from 8,000 to 9,000 kilowatt-hours per year. But, again, it is not actually that; it is simply a change in the regulation-making authority that the bill contains.

It is difficult to speak for any great length of time with enthusiasm or passion about this measure, and I will not endeavour to do so, other than to say that we support it going to the select committee. We look forward to what the committee’s examination reveals in due course; also to its decision on whether the bill is necessary or has served its purpose simply by being introduced in this way—sending a general warning about what might happen, if, in fact, power companies and other service providers do not get their act together with regard to vulnerable people, when it comes to the supply of electrical equipment. Beyond that, I think it is very hard to get too excited about this measure.

Bill read a first time.

Bill referred to the Commerce Committee.