Electricity Transparency Bill

I move, That the Electricity Transparency Bill be now read a first time. I nominate the Government Administration Committee to consider the bill. This bill is about protecting consumers. It is a guard against householders being screwed, because they are being screwed, or if they are not, they do not know whether they are or not because their electricity bills are so obscure and so opaque that they do not actually know what is going on. This bill is very simple. It simply gives power to the consumers to see which part of the electricity bill is being charged at what rate. If there is any change, they can see that from day to day and from bill to bill. They are able to go over to their next-door neighbours or whoever and compare one bill against another and see what sort of a rate their neighbours are getting. So it is about transparency of pricing, and that transparency of pricing will encourage competition.

The idea is, first of all, to unbundle the bills so that there is a clear separation from the various components of the electricity bill and, secondly, as a part of that, to estimate a percentage of what part of that bill is actually generated by renewable resources. It is an effort to be able to show people this and therefore give some sort of impetus towards renewables, as opposed to fossil fuel consumption.

We have an electricity system that is relatively complex, as they are all over the world. We have many generators, whether they are hydroelectric, whether they are geothermal, whether they are wind, or whether they are coal-fired. Those generators generate electricity. The electricity goes into the grid, which is looked after by Transpower, a State-owned monopoly. And from Transpower, off that grid, come the local lines groups, whether they be Orion, or Vector, or the lines company, or whatever. Each part of the country has its own lines company. Finally, the electricity is delivered to the householder and billed to the householder by the retailer.

A few months ago when I put this bill into the ballot—and it has not changed since that time—power prices were going up. Each of those components, whether it be the power companies or the lines companies, was pointing the finger at each other and saying that it was the fault of the power company or it was the fault of the lines company that power bills were going up. The remarkable thing about this was that nobody could disaggregate what was actually going on. So even when the Electricity Authority, Consumer New Zealand—a whole bunch of different people—sat back and looked at it they could not see what the different parts of the electricity bill were made up of and which parts were going up and which were staying static. An unseemly row broke out. Contact Energy pointed the finger, for example, at Wellington Electricity, and Wellington Electricity told Contact Energy that it was a liar. The whole thing went round in an unseemly circle. But the bottom line, and the key issue here, was that consumers were not able to see what was happening in their power bill but they should have been able to. We all should know which components of our electricity bill are made up by which parts. Surely that is straightforward.

Let me give you another example: Vector, the lines company in Auckland, was told by the Commerce Commission that it was charging too much. It had to drop its lines charges by 9 percent, which it did. Under law it was obliged to. What it expected to see was that drop flow through into people’s power bills. It never happened. Why not? Because the power companies absorbed that windfall, if you like, themselves and did not pass it on. Actually, nobody knew because there was nothing out there that was going to be able to indicate to them that their power bills had changed.

So in New Zealand, we have—in a sense—these conglomerates that have a pretty comfortable existence, whether they be the banks, or the power companies, or the building supply companies, or whoever. I believe that consumers need and deserve a better deal, and that is what this bill is about. It is about unbundling our electricity bill so that we can see what is going on and we can make choices on the basis of that, and that, in turn, would encourage competition.

The main electricity body in the country, the Electricity Authority, is charged with trying to ensure that there is sufficient competition in the electricity sector. So the Electricity Authority, after this happened, announced that it was going to do a survey and do some analysis on unbundling these bills and providing more transparency. So it went out and spent thousands of dollars and talked to everybody, but—surprise, surprise—the electricity companies came back and said: “We don’t need any more transparency. The consumers have enough transparency.”

Contact Energy said that not only has it got enough transparency but it would be too expensive for it to do it and actually it is not sure if it could actually do it anyway. Despite the fact that we have got telecommunications companies all across the country that can tell you almost minute by minute what your phone bill is, a power company as large as Contact Energy, which has just spent tens of millions of dollars on its billing system, cannot give you a breakdown of what your bill is. Then along comes Flick, a small retailer that is not only able to give you a breakdown of your power bill by sector—whether it be the generator, Transpower, the grid, or the lines company—but also can tell you hour by hour what the price of electricity is. So for Contact Energy and others to say that this is somehow impossible for them is absolute nonsense.

So there is a conspiracy and a cloak of opaqueness and convenience around power bills that benefit the power companies at the expense of the consumer, and I want to see the consumer getting a better deal. Unfortunately, I believe that the Electricity Authority is more of an apologist for the status quo and what is going on rather than an authority stepping up and being on the side of the consumers, which is actually part of its rationale in its statement. In fact, it is really only talking to people in the know. If you have a look at its website, I can guarantee that 90 percent of New Zealanders would not spend more than about 3 seconds on there, because everything is so densely presented there that nobody could actually make sense of what it is saying and what it is doing. It is certainly promoting the status quo above what consumers would want to think of as an Electricity Authority that is standing up for them.

This bill is a member’s bill and I am asking for support right across the House, because, let us face it, this is something that the National Party would—I would imagine—be wanting to support. I was on a panel with Simon Bridges, the Minister of Energy and Resources, when he said that, yes, he thinks billing will need to be broken down into its component parts. He is on record saying that, so, in a sense, it is part of what he wants to do. It is part of, I would have thought, the ACT Party’s agenda of giving consumers—after all the “C” in ACT stands for “consumers”—the benefit of actually having good information and transparent information so that they can make good choices. Unfortunately, I do not think that right now people are able to make good choices, because they are not getting good information.

So this is the chance for the people in the House to vote on the bill going through this first reading to a select committee so that we could actually bring in the various components that make up our electricity system in New Zealand and have them talk about what transparency means—to have Flick alongside Genesis and Contact Energy and ask whether this is possible or not. Why can consumers not have good information? Why do they have to rely on the press releases of power companies or lines companies in order to be able to get proper information? Incidentally, the Electricity Authority’s recommendations, after spending tens of thousands of dollars on this analysis, were to have some guidelines, which, of course, nobody is adhering to. I mean, guidelines are the lowest bar that you can possibly come up with in terms of recommendations. So I say again that this is a bill that is on the side of consumers, that is promoting transparency, and that not only gives information about billing on those various parts of an electricity bill so that somebody can see whether they are getting a good deal or not but also provides some information about the sustainability aspect of their bill as well.

Thank you, Mr Assistant Speaker, for the opportunity to speak on the first reading of the Electricity Transparency Bill, sponsored by the member opposite, Mr Shearer. I rise in opposition to this bill. The way that Mr Shearer describes this bill, certainly, on the face of it, more transparency sounds like a good idea, but, at the end of the day, I think that this bill is misconceived. The question really is why this so-called extra transparency is needed. What is it actually trying to achieve? What is the problem that this bill would solve, and, if this bill was passed, what would be the effect on the electricity market—in particular retailers in the industry? The Government maintains that although this bill may be well-intentioned, it is misguided for a number of reasons, and I will come to outline those shortly.

What the bill aims to do is to bring into the market a specific mechanism—that is, itemised billing—so that all electricity retailers must include on every electricity bill sent to the consumer a breakdown of what part of the bill is attributed to the generator, the distributor, and the retailer, plus the GST component and any Government levies. Paying electricity bills is not fun for anyone, especially if you live down south—but I do note that Invercargill reached 28 degrees today, so it is not all doom and gloom in the winter down there—but it should be noted that residential electricity prices fell by 1.4 percent in the June 2014 quarter—

💬 Hon Member: How much?

—1.4 percent and that is the biggest drop since 2001. But in the grand scheme of things, seeing a breakdown of costs in isolation is actually not that helpful. It is when the change in cost, that rise or fall, is seen that is the important distinction.

How these changes are communicated to customers is what is important. Within our electricity sector we do not want to start a blame game between the generator, the distributor, and the retailer, because that is simply unhelpful. Recently the Electricity Authority—which, again, is independent and charged with promoting competition in, the reliable supply by, and the efficient operation of the New Zealand electricity industry for the long-term benefit of consumers; that is, of consumers—looked specifically at the issue of transparency of electricity charges. After considering submissions from both consumers and the industry, the authority decided not to proceed with a standardised template of electricity bills. The reason it gave for not having prescription was that it would stifle innovation, and it would reduce the flexibility to tailor offerings to different customer needs and adapt to changes over time. Bespoke pricing is a case in point; developing and grouping options for a particular type of consumer for their benefit, which also gives the retailer a competitive point of difference, is a made-to-measure approach.

If retailers have to report prices in a standardised way it will be difficult to do and it will be costly administration-wise, and that cost—to go through this detail and break down the information—will ultimately be put back on to the consumer. So the effect of standardisation may be that retailers would move away from bespoke options to a more one-size-fits-all type of product. As I said before, those administration costs of having to break all those details down will be passed on to the consumer.

Bundling of services—such as electricity services with, say, telecommunications and broadband or gas, such as TrustPower has done—gives the retailer a competitive advantage but suits classes of customers, and that is another way that the industry has innovated in providing this. Bringing in a prescriptive measure of reporting for billing, as this bill would do—a certain way of reporting one’s accounts—reduces the flexibility of the retailer to make such offerings as TrustPower has done, and having that bundling of services has proved very popular with consumers. We do not want to restrict retailers’ ability to think outside the square and then pass that on to consumers.

Another example is the advancement in the way companies communicate with customers. If Parliament starts adding a layer of prescription as to how communications are supposed to occur with consumers, in a certain form, in a prescribed way, again, it stifles innovation. If you look at the evolution of technology and at, for example, our iPhones, the apps on our phones that are providing information have absolutely advanced. So retailers may be able to provide some sort of information via an app or using pie graphs or pie charts. A picture paints a thousand words, and this presentation in this way may, in fact, be more meaningful to a customer than a standard itemised bill.

So this type of prescription does not take into account how quickly the scene in the electricity market, or its structure, can change, especially if people move to self-generation, for example, by way of solar or wind, and how their generation will or will not be incorporated into the grid. We cannot foresee at this stage how the electricity industry and its structure will change with those advances in technology and with electricity generation becoming more accessible.

The other thing I want to touch on is that this bill wants consumers’ accounts to detail in percentage terms the amount of renewable energy used so that consumers can make an informed choice as to their electricity use. Companies are already using a percentage of renewables in their own marketing campaigns, and this information does not need to be accessed via a bill or an account. It is on the internet, and, as I said before, different companies are using it to attract their customers through their marketing brand and holding themselves out as renewable providers and being responsible users of the environment. Meridian Energy is an example of that. It advertises that it has 100 percent renewable generation.

So although this bill has good intentions, the Government believes that it is misguided. It is restrictive, and it is far too prescriptive. It does not solve an issue; instead it would prevent innovation and evolution in the industry. It would not, at the end of the day, be good for consumers, and, therefore, I do not support this bill.

I do not actually believe that the member who has just spoken, Sarah Dowie, believed a word she spoke. The reason I say that is because she contradicted herself so many times, to the point where I do not know whether she actually knew what she was saying. Let me give you a couple of points. Ms Dowie said that the electricity prices dropped by 1.4 percent in Southland in the last year. That is fantastic, but what Ms Dowie cannot tell us is whether that was the electricity charge, the generation charges, or the line charges. I would have thought that an informed consumer would actually like to know where the savings were made. The thing is that she is right on one point, though: this industry is fluid. There is great change going on and the thing that we do not know is what the sector will look like in 10 years’ time, but one thing I can tell you is that the industry is innovating in a way that we have not seen for a long, long time. We are not experts in this area.

The reason I think it is really important that these things go to a select committee is that we get the experts in and they say to us: “If we implement this bill, it may look like this. These are the advantages, and these are disadvantages.” The industry experts from both sides of the argument can actually inform us, and maybe Ms Dowie is right—maybe this will stifle innovation. But I cannot say that. I am our energy spokesperson. I have had good hard look at this, and I do not believe it will stifle innovation. In fact, I think it will promote innovation, and that is just based on all the research I have read. Mr Shearer is the same. He believes it will promote innovation, but we do not really know, and, as sure as eggs, Ms Dowie does not know whether it will stifle innovation. But there is a group of experts who work and live and operate in our electricity sector and who will be able to inform us. The thing is that if the Electricity Transparency Bill goes to a select committee, we will hear all the arguments about how it will benefit consumers or how it may stifle innovation, and then when it comes back to the House for its second reading we can make an informed choice. But, at this point in time, we are MPs who are passionate about this country, about doing right for good, hard-working Kiwis, and I think they would agree that they want to hear what the experts say, so let us send the bill to a select committee.

Let me give you an example of how innovation is changing the sector at this point in time. I moved to Flick recently. It is an online seller of electricity, and it provides me with an account that shows me the exact breakdown of where my bill comes from. So when Ms Dowie says that this is creating cost, Flick does not believe that. I know on Monday that my power costs varied between 12.6c per unit and 36.39c per unit. So I can make an informed choice. And this may sound a little anal, but what I did on Monday night before I went to bed was I turned the dryer on at 11.30 p.m. because Flick told me that the rate was down to 13c. I made an informed choice. But what it told me in my last bill was that it was $51.66. That is what all of us get in our power bills—$51.66. But what it told me was that $22.86 was transmission and distribution, $1.52 was for metering, $14.35 was for generation, $6.98 was for other, and what it told me was $5.98 was for electricity charges—that is all, in my whole bill, that was for electricity charges.

What this member’s bill does is it provides consumers with choice, with options, and with opportunities. This is consumer driven and in the 21st century I think that is what consumers want, to the point where the Inland Revenue Department (IRD)—yes, the IRD—has recognised that, and it is going to consumer-driven apps based on breaking down information. In conclusion, all I would like to say is that I believe that consumers deserve the right to understand what makes up their power bill. Whether they choose to exercise that or not, that is up to them. But at least what this bill does is it gives them the right and the opportunity to understand it. And I think that is what all consumers deserve. Thank you.

It gives me great pleasure to speak on the Electricity Transparency Bill. It is great to hear about the last speaker, Stuart Nash’s, power bill and the ins and outs of his power usage. But the reality is, if that member has a bill that discloses all that information, why do we need this Parliament to prescribe to other providers that they should do the same? And that really comes down to what it is about. This is about the Labour Party thinking it knows best and telling people what they should have in their bills. This is typical Labour Party rhetoric and—

💬 Stuart Nash: It’s about transparency.

It is not about transparency; it is about prescription, and it is about creating more cost when the market already provides it. The market can provide that information, as that member has said. Why does that member not believe that other companies would transfer their technology—

💬 Stuart Nash: Why won’t they?

Why do they not do that? Because there is not a desire amongst the public to do so, Mr Nash, and if there was a desire amongst the public, they would do so. This Parliament should represent the people’s desires. It should represent what the people want, not what Mr Nash or what Mr Shearer want in their power bills. Rather, we should be looking at what is in the best interests of New Zealand consumers—

💬 Fletcher Tabuteau: Oh, well, don’t—

—and New Zealand consumers have that choice. It is all right for the New Zealand First Party to sit there and groan and moan. It has never supported anything that has been good for New Zealand consumers. It never has and it never will, because its party is a party of negativity, and it is against any competition in any market, and that is shown by its prescriptive nature as well. It is a wonder that those members’ boss is not here to prescribe to them their speeches—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! [Interruption] Order!

That is the normal approach in the New Zealand First Party. But we do not need to put this into our electricity market and into our electricity companies and their billing arrangements. They are quite able to do it themselves. If they feel that it is a desire of the public to do so, they will do so, and without creating a lot of requirements on companies that may not be able to do so, or may not have the desire to do so, and on consumers that may not have the desire to pay for that extra increase of collection, then it is something that I think this Parliament should not invest its time in—making companies do something that they are able to do if they want to and consumers are able to request by moving to the company that delivers that information. Far be it for this Parliament to believe that it has the role to be prescriptive to all New Zealanders in how they live their lives. And I think that is partly what it comes down to with Mr Shearer and Mr Nash—looking to have every little bit of control and every little bit of prescription over consumers, rather than giving the market the choice.

Members may say “Well, that could be a very limiting approach.”, but it actually is not. It actually is about giving consumers and companies, more important, the ability to have some flexibility. Why not let them be flexible suppliers to the market? Why not let companies be flexible in the way that they deliver their bills to their customers? That flexibility is important for the delivery of products. If we are not flexible with their products, then they will not be flexible in their billing arrangements. So it goes to a prescriptive approach to the electricity market, and we all know what the Labour Party wants to do in the electricity market. The Labour Party wants to nationalise that market, and that is why the New Zealand First Party is supporting this bill, because it wants to go back to those days of the nationalisation of the electricity market. It was Labour’s policy at the last election. At the last election its policy was to nationalise the electricity market, and that was its policy. This is another symptom of this.

💬 Stuart Nash: I raise a point of order, Mr Speaker. It was never our policy to nationalise—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! No, no, no. You are wasting the House’s time.

For those listening, that is a common ploy by those who are in trouble—to try to do points of order when they know that they are in trouble. It was Labour’s policy; everyone knows that. Labour may not be able to enunciate that before the next election in its no-policy approach to the next election, but it certainly does believe that, and this is just another part of that process that it would go through. The New Zealand First Party is always a party that supports those kinds of things, because it believes in nationalising everything in this country, and then it would sell it, as its leader has—

Sorry, the member’s time has expired. Before the next speaker speaks, I would actually like to hear what the debate is about. There is a lot of background noise here, and I would like to hear Gareth Hughes.

Kia ora, ngā mihi nui ki a koutou, kia ora. I would like to start with a statistic that I think members may find interesting. I was having coffee with the chief executive officer of one of our large generator-retailers last week, and he told me that that single company has 14,000 separate accounts, which are 14,000 separate pricing plans. You know, it has got various options. You have got 29 different regional lines monopolies, all with their own different way of charging. If you apply that across the numerous retail companies across the country, we could have a hundred thousand different pricing plans in a little country of—what—4 million people. You think that is complex? What is really complex is when you open up your power bill, because it is hard to understand what on earth is going on. You may have tried to use less power in the week, but you would not know from the power bill because of all the fixed charges, the lines charges, the Electricity Authority levy, and everything else on top of it. This is a real issue and a tangible issue, and I acknowledge and salute the member David Shearer for putting the Electricity Transparency Bill in front of Parliament because we know our customers are struggling in New Zealand when it comes to paying the power bills.

When customers open the power bill—you know, first, you have got to gingerly tear it open because it is terrifying. You never know what it is going to be, but you know it is probably going to be higher than what it was last year. What we do know is that power bills have gone up some 25 percent in the last 5 years. New Zealand has seen the fifth-highest power price increases in the entire developed world since the Max Bradford energy reforms. The four countries ahead of us are all ex-communist countries coming out of Soviet domination. We have the fifth-highest power prices in the developed world, and what is the Government’s response to massively increasing power bills and a rise in energy poverty that now see a quarter of New Zealand families spending more than 10 percent of their weekly disposable income just to keep the lights on? Sadly, families are actually making that tough choice between whether they heat this week and whether they eat. And what has the response been? It has been: “Well, shop around. Use your consumer power.” I remember Simon Bridges in this House saying: “Those reforms still need a little bit more time to bed in.” How much longer are we going to have to wait for those reforms to bed in when we have seen the fifth-highest power prices over that period? What we have seen from the industry in response to those rocketing power bills and that real energy poverty is a blame game, or a blame-around, where the retailers blame the lines companies, the lines companies blame the retailers, and no one can make head or tail of it because everyone is blaming everyone else.

It reminds me of what the former chief executive officer of Telecom once said off the cuff, which was that part of its marketing was to cause confusion as a marketing tool. When you cannot understand your bill it is hard to change behaviour, it is hard to shop around, and it is hard to exercise your consumer power. At the same time we also see the National Government cut funding—or it has not extended funding—for the Powerswitch website where consumers can switch between power companies. What I have heard in this debate—and look, it has not been much of an intellectual or a true debate around the issues—from National members is that they want to keep consumers in the dark. I thought that party stood for consumer rights, for greater transparency. They said that the companies would do it—you know, competition will urge them to provide more information to their companies. If that was the case it would have happened already, but it has not. Then they said it was too costly. For those big old power companies with maybe 14,000 separate accounts and creaky backroom IT systems to deal with it, it may cost a little bit of money. But the fact is you have got innovative new retailers like Ecotricity and Flick that are coming into the market.

What consumers want in New Zealand is more consumer power. They are sick and tired; for decades they have been passively paying the power bill and seeing it going up. They want to produce some of the power themselves. They want a little bit more control. When I was in California recently doing an energy study tour, what I heard there is that the utilities are trying to think about themselves as providing energy services, not just pushing electrons one way down those wires. It is for the reason that consumers are kept in the dark and are not being given real choice that they are going solar in record numbers. I am supporting this bill, and the Green Party is, because it is part of giving consumers more control. It is part of our mission for energy, and my mission as energy spokesperson, to get cleaner, cheaper, smarter, energy for New Zealanders. Now we can do it. The question facing Parliament tonight is where members stand. Is it with those old power companies and their old creaky IT systems that cannot get there, that spread confusion and doubt when it comes to their power bills, or are they going to stand on the side of consumers and the new energy economy to make sure that consumers can have a choice, transparency, and make decisions based on them.

I rise on behalf of the ACT Party in opposition to this bill. Aristotle once said that a speaker should have logos, ethos, and pathos, and that member was a speaker who actually managed to fail at all three. But I do want to commend the member who brought the bill because I think it is actually important that we continuously attempt to improve the functioning of our electricity market, and I believe that the member sincerely wants to do that.

So I wanted to come to the House and make a speech to explain why I am opposing that attempt. I think the member’s argument breaks down to the fact that there is a suboptimal amount of information about electricity costs, or at least the contributors to electricity cost structures, appearing on the bills that we receive when we pay our electricity bills. So the logic continues that if there was more information, the market would somehow become better.

I think we have to ask, first of all, what is the market failure? What is preventing electricity companies from doing what the member’s bill would require them to do? Quite obviously nothing, because so far three speakers in favour of the bill have pointed out that there are electricity companies already doing precisely what the bill would require them to do. Then you might ask, perhaps, are those companies somehow outliers that are swimming against the tide of the incentives that the market gives them? Is there some sort of conspiracy going on, and is it the case that perhaps there is a systemic incentive not to provide more information?

Again, it is really not clear why, in a highly competitive market, any of the incumbents would not want to compete on providing more information. Perhaps the reason they have not done that, as David Bennett alluded to, is that information and the processing of it is actually costly. Information is something you should give up real resources in order to attract, and it is just not that appealing to have a more complex bill.

A great irony was that Gareth Hughes pointed out just how complex it would be, given the number of different permutations of generators, retailers, and distributors that there are in one transmission company across New Zealand. So perhaps it is the case that this bill would actually add enormous costs across the sector that so far, given the choice, retailers have decided is not worth competing on. But if you were to ask, a little further along the chain of events, what would happen if consumers were to be provided with this information—if we assume that prescribing by legislation is not going to stifle innovation in the way information gets passed through the market. If you assume that—and that is a big assumption—how would consumers respond to having this information? Presumably they would be more likely to switch their electricity company, based on having some information about some particular sector of the system that was not serving them very well under their current retailer.

It is an open question whether that would actually be a positive occurrence, because one of the things that I find difficult to defend as part of our market-based electricity system, which is otherwise very good, is the dead-weight cost of people constantly switching retailer as new information comes to pass. It is with some irony that Gareth Hughes argued that he wanted more information and more switching in a market characterised by those two features that he does not support. Perhaps they would switch more, but perhaps they would also decide to take political remedies to perceived difficulties with the market: that one particular sector needed to be better or worse regulated.

Again, it is not clear that we are going to get an efficient outcome by having political lynch mobs going about trying to attack a particular part of the electricity system. As you can see, it is easy to have good intentions in electricity markets but the further you go, the more complex it becomes. So I have to oppose this bill simply because while the intentions are good, once you account for the unintended consequences and the real cost of information in a market, this bill will leave electricity consumers the same at best, and worse off if we are not lucky at all.

It was disheartening to hear the previous speaker, David Seymour, in his contribution. He spoke about markets and information, but one of the first fundamental failures of most markets, in any economy and in any market, is the lack of perfect information, and that is the debate we are having tonight. What is it that we are being asked for here? We are being asked for information so that the consumers can make choices. National Party members have stood up, one after the other, and told New Zealanders—they have literally told New Zealanders—that they would be better off in the dark. Those members have told New Zealanders that you do not need to know.

💬 Pita Paraone: And that is literally.

They literally want to grow New Zealanders like mushrooms. It is actually unbelievable—unbelievable.

There are elements within the sector that have been seen to have spun a story for some of the members here tonight, and they seem to have lapped it up wholeheartedly. They have taken it in hook, line, and sinker. There are elements in this electricity industry that profit from the opaque nature of this electricity market. They are incentivised by and they profit from the fact that consumers do not know what is going on. For National and ACT members to stand up and tell New Zealanders that they should continue to be grateful for not knowing what is going on is unfortunate and an anathema, I believe, to everything that they presume to publicly stand for.

I would like to commend Mr Shearer for this bill. This is core New Zealand First policy, so in our mind it is good, common sense that this information be out there. This legislation is about protecting consumers. It is about empowering consumers. It allows them to compare and contrast. We were given examples like Flick Electric. The unfortunate reality, and the counter-argument that says why everyone does not go down that road, is that it is not a national entity. You cannot get in there in different regions; you cannot opt in from everywhere. It is about choice, and the reality is that it is not there. As I mentioned, the reality is that there are elements that are incentivised to keep these secrets. It is about transparency. This knowledge gives average Kiwi households, in particular, the power that they deserve to make real and informed decisions.

Actually, I would like to point out for the benefit of the members opposite that the Prime Minister and the Minister of Energy and Resources are on record saying that transparent billing systems and itemised billing systems are actually a great idea. So I think that side of the House has got its politics round the wrong way tonight. Those members are talking against their leader and the one who gave them the job, so those members need to acknowledge that transparency and itemisation is a good idea, as they are on record saying that very fact. The National backbench has got its politics wrong tonight.

We have heard of the Flick Electric example, like I said, but what I also want to point out to Ms Dowie is that we also have the likes of Dr Heffernan, who is in charge of a big retail company, going on record saying that, actually, this kind of legislation is absolutely appropriate and that this is the track that the industry needs to go down. So I do not think it would resent it. I think the fact that ACT will not support this bill to at least go to its select committee stage because the industry does not know what it wants—well, that is what a select committee is for. It is so that we can have those conversations, so that we can understand what the pressures are and, hopefully, get around them. New Zealand First supports empowering consumers—unlike this Government—and so we wholeheartedly support this piece of legislation. Thank you.

I would call this bill a solution looking for a problem. That is the way I would describe it. With due respect to Mr Shearer—

💬 Hon Clayton Cosgrove: You said that about Solid Energy.

Hello, Mr Cosgrove. Good to see you back in the House. With due respect to Mr Shearer, I was at that hearing when Doug Heffernan spoke. He did speak about some of the possibilities of what this would create, and what we see is that the Electricity Authority is already putting into place mechanisms around this.

So to address the concerns about transparency of consumers’ electricity charges, the Electricity Authority has consulted on a proposal to “require retailers and distributors to consult each other about any media releases”—that is, communication to consumers—“… about changes to consumer charges in a distributor’s area.” This will “require retailers to provide information, in a standard form, to consumers about any price changes” that makes clear the nature and reasons for price changes.

So what this bill is wanting to do is to unpack all the different elements of what makes up an invoice so that people can see, well, this is the price for this and this is the price for that—there are usually around about seven different components. We know—and if you do not mind I will go back into a little bit of history, because we know that just recently the Labour Party has scotched its one power purchaser proposal.

What I want to read out is a response to that—and I am not doing this for political reasons; I am just doing it for information for the consumers out there. They need to hear it because Mr Heffernan has been quoted as being a great supporter of this idea, Mr Shearer, and this is what he said back in August a year ago. This is the quote from the Mighty River Power press release: “Mighty River Power Chief Executive, Doug Heffernan, says the official data from the industry regulator (Electricity Authority) and audited results reported by major power companies this week tell a very different story of a highly competitive market with flat to declining energy prices.”

That is why I say this is a solution looking for a problem, because what we are already seeing is that in this highly competitive market, where we have nearly got over-generation, we have seen for a number of years now the flattening of prices—and even the dropping of prices—and of energy charges. If we look at the componentry of what makes up a charge, and they have gone up—Mr Shearer will know that we have gone through an incredible rebuild of Transpower’s national grid.

If I could just read out a comment and a quote from the Auditor-General’s report on Transpower, it says this—and this is going back to June 2008, which is when the previous Government was in power—“In June 2008, Transpower commissioned an independent review of its maintenance practices and spending. … Discussions with staff of both Transpower and the contractors revealed a workforce that [was] innovative [in its] approach to solving problems.” Fantastic. All right? Congratulations. “This has been driven mainly by a need to keep operational an aged asset base as little asset replacement has been undertaken on a broad basis in the last decade.” The last decade—2008. So that is during the tail-end of a National Government and all of a Labour Government that there was very little asset replacement.

So since then to now, about $5 billion has been invested in Transpower, and, as a State-owned enterprise, obviously there is a need for a return on that level of investment. So we know that when prices have increased—and it has been half the increase under National compared with what Labour gave us—we know that most of it, let us say, has been generated by the required upgrade of assets by Transpower. All right?

💬 Stuart Nash: But make it transparent so the consumers know. Give the consumers an opportunity to know that.

Look, there is going to be a Transpower fee in every retail bill—every retail bill. Why do you not just come out and say—

💬 David Shearer: Where is it? It’s not there.

Do a press release and say, Mr Shearer, “OK, this year, this is what the Transpower cost is going to be.”—end of story. Instead, you want to create a very complicated mechanism. You want to find a solution for a problem that does not exist, because what we are seeing is a very competitive, cost-effective market that is working, with 26 retailers out there competing for the consumer. All right?

We are in a great place, and we just need to see this continue to grow and develop. Thank you. And we do not support this bill, obviously.

It is a pleasure to stand up and support this bill. The Green Party supports transparency. It supports consumers’ right to know. I am amazed, sitting here listening to speeches, that people are arguing against transparency—against consumers’ right to know. I find that highly offensive to consumers. We have the right to know what components make up our power bills. We should not be patronised by National and ACT and be told: “Oh, you don’t need to know this information. We’ll take care of that for you.” That is incredibly patronising. Power is a significant part of people’s daily expenses, and we have the right to be able to be fully informed and decide for ourselves which power supplier we will use. There will be many decisions and factors that go into weighing up who we will use, and consumers are not going to switch suppliers at the drop of a hat. It is a cumbersome process—ringing up, sorting it out, trying to work out who is available, and so on—so the kind of scenario that was being outlined by Mr Seymour I did not find very credible.

The reality is that consumers are going to sit down and really think about who they want to be their main electricity provider, and they are going to weigh up different elements about what works for them, what is their pattern of power consumption, do they have an overnight storage heater, is there a lower side rate available, where are they in the country, and also the right to know how that power is being generated is really important, especially in today’s climate. When climate change is one of the most incredibly challenging issues that we face, we have the right to know as consumers exactly what proportion of our power bill is made up of renewable energy and is generated from renewable sources. That is an important piece of information, and consumers have the right to know and access that information and should not have to go hunting for it. To have it presented on the power bill is an incredibly important part of transparency, and we, the Green Party, support Shearer’s bill for bringing in transparency for us to be able to act upon. It is incredibly important.

It is important, also, to be fully informed so that we know how we can conserve energy. If we know that the bulk of our power bill is made up from line charges, there is not going to be a lot that we can do to conserve energy. So greater billing transparency is a good thing, and it is incredibly patronising and unbelievable that National and ACT can stand up there and say they do not support transparency and they do not support consumers’ right to information. I find that absolutely staggering. Why not? Why should we not be informed? It has been proposed before, but the industry lobbied against it. Yes, there are some new reforms coming in, but they are much weaker than what is proposed in this Electricity Transparency Bill.

I commend Shearer for bringing it to the House. We will be voting for it. We are in favour of transparency. We are in favour of consumers’ rights to know and to be able to make informed decisions around which electricity supplier they will use. Thank you.

It is a privilege to speak—unfortunately, in opposition—to the Electricity Transparency Bill in the name of Mr David Shearer. I think it is a—

💬 Fletcher Tabuteau: We understand why you’re sad about opposing it.

Well, I think that the reason why I am opposing it is that although it is incredibly well intentioned, I think that the Government and the industry over the last couple of years have come a long way in terms of meeting the concerns that were raised around transparency around pricing by the industry, leading back to probably about 2014. I think that since then there has been a number of steps that have taken place, in terms of the Minister of Energy and Resources and the Electricity Authority, to address the concerns around transparency of consumers’ electricity charges.

There are a number of things that happened most recently. I will just list a couple of main points: the requirement for retailers and distributors to consult each other about any media releases about changes to consumers’ charges in a distributor’s area, and also the requirement for retailers to provide information to consumers about any price changes. I think the most fundamental tool that consumers have if they are unhappy with the level of transparency or the pricing that they are receiving is the What’s My Number campaign, which has proved to be incredibly successful since it was initiated in about 2013. There have been about 400,000 consumers who have completed switches since then, which proves that the mechanism is currently in place for consumers who are maybe feeling that they are receiving higher pricing than they should or that they are not receiving adequate information from the retailers. They have got the opportunity to switch if they like. So that is probably the main reason why I oppose this bill, although it is very well intentioned. Thank you very much.

We have had some pretty lacklustre, average sorts of responses from the other side as to why those members are not supporting transparency and full information by which consumers can make a choice. It is kind of surprising, really, when it is coming from the side that purports to be the party of pro-market. For example, Jonathan Young and Todd Barclay were just talking about the fact that somehow a press release, which is an optional mechanism that can be adopted by power companies, is going to be as good as getting a fully annotated and broken-down power bill. Let us face it, guys: that is rubbish.

The Electricity Authority came out with a report that has got to be the lowest possible intervention it could possibly scrape out to try to keep up some sort of semblance for the tens of thousands of dollars it spent on that study. Then David Seymour from the ACT Party stood up and made, actually, quite a good contribution, but it consisted mainly of questions: “What about …”, “Perhaps”, “Maybe”. The way to actually get around that is to send it to the select committee so we can actually get the industry—

💬 David Seymour: The answers were implied.

—to give the answers that, perhaps, Mr Seymour lacked when he stood up to make his contribution.

The real issue here is about consumers getting a fair deal and being able to look at their power bill and understand it. The power price has gone up 25 percent in the last 5 years, and every time it does there is finger pointing between line companies, Transpower, power companies, retailers—whoever—that they are not to blame and somebody else is. You can talk about all these power prices coming down. Ask the people out there, Mr Young, about power prices going down. I can tell you, you would be hard-pressed on the street to find anybody who could tell you that their power price has gone down.

This is about real information. Let me give you another example: meters—power meters—smart meters. We have had smart meters installed across our country. They are the dumbest smart meters in the world. They give the power companies the ability to know what you are consuming in terms of your electricity every 15 minutes, and what everybody else in the world gets is real-time information on a minute-by-minute basis of what is happening inside the home, so they can turn on their dryer late at night or they can make use of cheaper power. We have dumb power meters that will not give us that. They will give the electricity companies lots of information, but they will not give it to the consumers.

Why is that? It is because they do not want you to have good information. As Theresa Gattung once said about the telecommunications industry, it makes good business sense to keep people in the dark, to keep it opaque, to keep them confused. That is what we have got now: confusion that suits the industry down to the ground, and that party over there is backing that. It does not want to have consumers being able to know what their power bill is and to be able to break it down and make informed choices.

If I were sitting here watching this debate today, I would be disappointed with the National Party not standing up for consumers and with the ACT Party—with consumers in the name of its party—not standing up for consumers. I would be saying: “I give up on these parties, because they do not stand up for what they believe in.” I would recommend that instead they go to a company like Flick Electric Co. and try to get a better deal. Unfortunately, the number of Flicks we can sustain throughout the country—and it has only less than 1 percent of the power market right at the moment—is not going to be great enough to make a huge difference.

That is the real tragedy of what we are talking about today: that what we could have easily done is what the Minister of Energy and Resources has purported to want to do, which is to break down our bills into their component parts. That is what Doug Heffernan of Mighty River Power has wanted to do: to break down our power bills into component parts. In fact, just about everybody agrees with that. You talk to Simon Mackenzie, chief executive officer of Vector. Look at its submission. Of course it wants to see these broken down. This is a bill that is, unfortunately, a wasted opportunity. Thank you.