Electricity Industry Amendment Bill

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

ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Electricity Industry Amendment Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 31 March 2022. I intend to move that the committee have the authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day in which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, and outside the Wellington area, despite Standing Orders 193, 195, 196(1)(b) and (c).

The bill will implement a number of recommendations from the 2019 Electricity Price Review, to improve the electricity regulatory system and ensure it is more fit for purpose, in light of significant changes occurring in the industry. The main amendments proposed to the Electricity Industry Act are strengthening the consumer voice: consumers, and particularly households and small businesses, struggle to make their voices heard and to engage with, and exert influence over, decisions affecting them in the electricity sector; (2) clarifying the current ambiguity regarding the Electricity Authority’s power to regulate to protect the interests of small consumers; (3) addressing the need for more adaptive regulation to respond to technological advances, especially where regulated monopolies are competing with other businesses to sell services to consumers; and (4) clarifying that the Electricity Authority should be able to regulate all parts of distribution access to agreements, as it already does for transmission access agreements.

The 2019 Electricity Price Review identified that residential and small business consumers struggled to be heard on decisions affecting them in the electricity market in New Zealand. This is often due to technical complexity and a lack of time and resources. The bill provides for the appointment of a consumer advocacy agency to provide evidence-based advocacy for household and small-business consumers. Having a strategy basis for this consumer advocacy agency may enable it to be funded from the electricity levy. The bill will add an additional objective to the Electricity Authority’s statutory objective, which currently is to promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers.

Despite the reference to, and I quote, “the long-term benefit of consumers”, there is uncertainty about the Electricity Authority’s jurisdiction to protect small consumers. The bill will give the Electricity Authority an additional objective of protecting the interests of household and small-business consumers in their dealings with industry participants. This will clarify and strengthen the Electricity Authority’s important role in protecting household and small-business consumers in their dealings with industry participants.

The 2019 Electricity Price Review preferred to give the Electricity Authority a consumer protection function without also changing its objective, to minimise potential unintended consequences that might result from changing the objective. However, further analysis concluded that it is prudent to also change the objective due to the risk that a consumer protection rule might be considered inconsistent with the existing objective. For example, a requirement for retailers to make reasonable efforts to contact a consumer before disconnecting the power for non-payment of a bill could perhaps impose disproportionate costs on some retailers, making them less competitive and thereby reduce competition. 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 relationships that can result in adverse outcomes for small consumers.

The need for more adaptive regulation arises from emerging technologies and services that blur the boundaries between generators, distributors, and retailers. The bill will give the Electricity Authority greater flexibility to respond quickly, if necessary, to develop rules that can respond if existing participants used monopoly or market power, deliberately or inadvertently, to deter competitors from entering the market for such products and services, 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, or more choice, enabled by these emerging technologies and services. The 2019 Electricity Price Review found that the lack of standardisation of terms and conditions for network access agreements between distributors and other parties seeking access actually raises costs and impedes competition.

The Electricity Authority has made good progress in addressing this issue under the default distribution agreements through existing co-provisions, but this was impacted by legal action questioning the Electricity Authority’s ability to regulate distribution agreements. The bill will enable the co-provisions to regulate distribution access, terms, and conditions as it already does for transmission.

The bill also provides for other matters that will improve the electricity regulatory system. It will clarify and improve the Electricity Authority’s powers to gather information from industry participants, for the purpose of carrying out reviews or investigations requested by the Minister of Energy and Resources. The Electricity Authority’s current information-gathering powers cannot be used for the purposes of an inquiry requested by the Minister of Energy and Resources. This interpretation defeats the intent of the policy, which is that the Electricity Authority should be able to use its information-gathering powers when undertaking a review or inquiry requested by the Minister of Energy and Resources.

This bill will enable the Minister of Energy and Resources to amend the code if there is not satisfactory progress on specified matters. This will be a time-limited power to ensure timely action by industry and the Electricity Authority to consider and progress improvements to the retail and wholesale electricity markets for the benefit of consumers. The Government expects that, taken together, the changes proposed in the 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, Mr Speaker. In listening to the Minister’s speech on this bill that we’re discussing today, it was rather interesting, for a start, that the Minister said he intends to move at the appropriate time that this bill is reported back by 31 March 2022. So I just did a quick count, as you do, and realised that’s six months, and I thought, “Whoa, that’s a bit of a change for this Government—to actually be giving people time to come in and do some submissions.” I will give the Minister a tick on that one.

💬 Hon Stuart Nash: Thank you.

The ticks are going to start running out soon or later, though. [Interruption] Exactly. So this is a bill that is partly put in place to protect consumers, and no one would have any problem with that. No one on this side of the House has a problem as it is very difficult often for small consumers who have a problem to be able to be heard. The question is whether we need another body to do that—we have the Commerce Commission. So that’s one of the questions that we will certainly be looking at having answers to as we move through the select committee process.

Residential and small businesses do struggle to be heard. But the big problem we had this year, actually, wasn’t with the small consumers wanting to be heard. We had awful problems this winter partly because the hydro dams were low, partly because the gas was low, and we’ll have serious debates as we move forward in time as to the causes, or not, of that problem. Some of them were in the gas fields and some of them were brought on by Government decisions. The wholesale prices that happened in the electricity industry this year were horrendous for our processing businesses, and we have businesses that know that if they have to put up with that for a series of winters to come, they’re probably likely to pick up their processing and take it offshore if indeed that is possible. If one is a milk-processing company, then it becomes less possible to take raw milk offshore to process it.

Since I’ve been the spokesperson for energy, which was around last November, I’ve talked to a lot of people in this industry, and I think there’s one word that is probably used above any other word and that is “uncertainty”. The big problem that we have with this piece of legislation is the fact that it gives the Minister permission to stick her fingers in the gearbox of the electricity sector once again. And it appears that every time the Minister and this Government start interfering with the electricity market, the electricity suppliers, it goes wrong. So we can start with that awful decision around removing the oil and gas permits. As we know the climate commission has said that we’re going to need gas as part of our transition for a number of years to come, and it was a very short-sighted decision that led to that. So that was the first piece of uncertainty.

The second piece of uncertainty is this project that’s going on, costing $100 million, deciding whether or not to do a project called Lake Onslow. Very few people are in favour of Lake Onslow and that’s the other thing that is constraining the market from investment, because when the Government goes and puts a proposed project out there with a proposed cost of $4 million, we all know that’s going to be a joke; it’s more likely to be double that, as it is with most projects. And it’s centred around a couple of wetlands, and we all know how that goes under the current Resource Management Act. So we’re 10 or 15 years away. Even if that idea was to eventuate, we are 10 or 15 years away from having that done.

The third thing that this Government is doing to create real uncertainty in the electricity and the energy market is that they’re taking their time around what the climate commission has pointed out to them, which is that the 100 percent renewable electricity target is the wrong target to be going for. I think the Minister probably would have seen graphs similar to the one I’m holding that show that you get to 95 percent and then all of a sudden the costs go up, and I ask myself every day—and I ask the Minister—and I would like to get some answers around this. If we took that away money that was spent trying to get that last 3 or 4 percent of electricity that was used in the energy sector—where we have real problems with emissions from transport and heat processing, creating a big problem—took it away from that sector, we would get to our climate change goals much faster.

So what we are seeing as a result of this Minister putting her hands into where—they should stay in the governance process and not in the management of this. Back in 2016, on 9 August—9 August has become a really significant day in the electricity industry, because that was the day the lights went off, on the coldest day that we’ve had this year. So that’s to that point. That’s when the communication outage took place. It turned into a power outage but it started off as a communication outage, one which the Minister found out about from a 1 News reporter calling the office, which doesn’t really give me great heart that anyone communicates in the Minister’s office or in the office of the Minister for State Owned Enterprises. So the Minister initially strikes out at Genesis Energy and says, “Oh, they made a commercial decision.” When we find out what actually happened, Genesis Energy had no time to heat up the Rankine to burn more coal, which, by the way, is the result of Government decisions. Hence the lights went off. So it didn’t turn out that that was the problem at all.

I have asked the Minister in written questions as to whether she intends to apologise despite a slight back-down by Minister David Parker in the House at the time on that statement, which wasn’t his. The Minister has not been very keen to front up and apologise to Genesis Energy for making that statement.

So going back to another 9 August 2016, “New Zealand heads towards 90 percent renewable generation”. Currently, and this is just one page from 18 July from the system operator, “Renewable generation for the last four weeks, 76.7 percent.” I think last week it was actually down under 75 percent. So this Government has taken renewable energy—and we know that the Government can’t make it rain; we accept that. But there are a lot of decisions that the Government’s actually taking that have had huge effects on this. So that is why the National Party will not be supporting this bill at first reading. We do believe that, yes, there are some consumer issues in there that could be improved, but we don’t believe that the Minister needs any more power in the electricity industry than what she’s already had to cause the problems that we’ve already got.

I just want to make a quote. Back in 2019 when the Minister said we won’t die in a ditch over the last couple of percent of renewable electricity if it places unreasonable costs on households and puts security of supply at risk, there was no announcement on Onslow made at that time. But by the following year, it doubled down on the target and it moved that the Onslow project was going to take part. It’s not specifically related here but we do have concerns about the technical ability, which we’ve raised a number of times, of the people in that group.

So just looking here at the bill in terms of the departmental disclosure statement, “The Panel considers that the level of analysis is sufficient for most of the proposals as it’s commensurate with their size and expected risk and impact. However, the analysis of costs and benefits and of safeguards is incomplete around the proposals to: extend the Electricity Authority’s power to regulate monopoly businesses’ involvement in emerging contestable markets; and to provide a regulatory ‘back-stop’ mechanism. The Panel recommends that MBIE do further analysis of these two proposals and update the RIA prior to tabling legislation in Parliament.” So this is another poorly thought-out bill that will have bad results. We oppose it. Thank you, Mr Speaker.

Thank you, Mr Speaker. I appreciate the opportunity to take a call on this excellent bill as the Government continues to do good work in this area. I think it’s important at this time, though, to look back a little bit, because if you look across New Zealand we have a lot of infrastructure that’s been built over the past—well, in this case, over a hundred years. In fact, the first hydro dam was built in 1885, and it was built in the province of Otago at Skippers Creek. We had a few more built after that in the early 1990s and then quite a significant building of hydro dams between the 1960s and the 1990s. I’d like to acknowledge all of those who worked incredibly hard, men and women, to build these dams—this infrastructure that we have. We wouldn’t be having this conversation if we didn’t have that infrastructure, so certainly very important.

We’ve heard from the Minister what the bill does. I understand it’s coming to the Economic Development, Science and Innovation Committee, which is a very hard-working committee, and we look forward to receiving a number of submissions on this bill. I’d like to thank the Minister for her work in this area and commend the bill to the House.

Thank you, Mr Speaker. There is a trend developing today in this House when members of the Government speak. Firstly, they say the Government is working hard. Secondly—

💬 Hon Members: Ha, ha!

No, that wasn’t meant to be funny but it is. Secondly, on these really important pieces of legislation, they are speaking for about one minute 23. Imagine if they were really, really, really important pieces of legislation, the public may get three minutes or four minutes out of them. Here is the problem with this Government: talking is not working and working is not talking, unfortunately.

I met a builder in my electorate a little while ago who was complaining that he never built any houses because all he did was talk. Here’s the problem with this piece of legislation. When the chair of the committee stands up and says his committee is hard-working and the Government is hard-working and the Government, actually, say, “We care about the price of electricity and the impact it has upon consumers, so let’s set up somebody to talk about it.”, it doesn’t help people pay their electricity bills. It certainly doesn’t bring it down. I guarantee you, having listened to the speeches in the House from Government backbenchers that range from one minute 23 to one minute 47 if they drop their notes, that actually the talking that will be done won’t even make those consumers feel better.

The electricity industry is a very, very challenging thing to get right. A former member of Parliament for Rotorua who was charged with making reforms many years ago—actually, in the end, it was one of the reasons, perhaps, that it cost him his seat. Here is a salient lesson to the Minister, because the chair of the committee just started talking about the very first hydro dam that was built in New Zealand. I didn’t know whether the Government was taking credit for that or blaming National for it. But the point here is, actually, when it comes to a history lesson, history does repeat. If a Government talks and gets regulation wrong—and I think this Government has a real challenge coming when it comes to electricity in New Zealand.

What we didn’t hear from the Minister, when he read the speech, or the chair of the committee, was just what happened this year alone. We’ve canvassed it in the House. But if they actually care about the cost of electricity upon consumers, both the household—who are crippled by cost of living, rents through the roof, food has gone up, electricity is challenging for them—mums and dads who are working hard, the working poor, who are having to choose between paying the bills or feeding the kids. If they actually cared about that, they would have talked about the blackouts that happened this year. There were a lot of excuses from the Government. I mean, the most appalling thing, I must say, when it comes to the explanation the Minister of Energy and Resources gave in this House was that she found out via the media. Oh, my gosh.

So here’s the challenge that we have: blackouts this year, more coal imported than any year ever before, a gas ban that, you know, we can argue about, but is having an impact upon investment and electricity, the number of trucks rolling down the highway from Auckland in lockdown to the Huntly power station to generate electricity from coal. And what the Government wants to do, the solution is, a committee to talk about these things, to give consumers a voice. Well, for constituent MPs in our electorates, they already know consumers have a voice and their voice is, “We need help, real help. We just don’t need talk. We don’t need a Government that’s saying we’re working hard, that we understand, that we care.” Caring doesn’t turn the heater on, doesn’t help a consumer pay the bill, and New Zealanders are struggling.

This will come before the committee. It’ll be like other bills we’ve had in the energy sector that have come before the committee: the Government won’t actually listen to submitters. Now, you don’t have to do everything a submitter wants, because, of course, there will be many, many different views that will come before the committee. But one of the great things about a sector like this is there are real-time experts out there who have experience. Sadly, I remember when I was a Minister, officials don’t know everything. It’s easy for a Minister who’s under pressure, who has far too much to do, to just assume the officials know what’s best and what’s right. But you’ve also got to get out of the offices in Wellington that don’t have the windows and listen to people on the street about what’s affecting them, and then go to the sector and listen to the reasonable experts, the ones that are experienced, that this is their life work, about how to make it right, how to get it right. Very, very few of them would say, “The very best thing you could do is to set up another agency to talk with little power, if any at all.” It’s not going to make the change or the difference that they hope.

That’s what this Government will be judged on, not the announcements, not the “We’re working hard. We’re a great Government. We’re hard-working.” It’s whether or not they’re making a difference to people’s lives. Sadly, this legislation won’t. The Government has missed an opportunity to actually do something about the cost of energy and electricity in New Zealand.

I would imagine that we’ll see the Minister of energy again attacking the generation companies, because she likes to do that. If ever the Government is under pressure, the media notices there are blackouts, they go on attack mode, and they spin. They attack those who are generating electricity or they attack the companies who own the lines and move the electricity around the country. Or what they often do is they talk about the retailers; they are the ones who are actually responsible. Well, the Government has the regulatory tools, they have the ability, with their large majority, to do what’s right for New Zealand. Instead, they do just what they want to do, whatever they want, and, sadly, this is a missed opportunity here.

They could actually say, “We are going to find ways to have more generation in the short term as we move towards the goal that we have of sustainable electricity production.” But we have to remember that when they came to Government four years ago, we had one of the most sustainable energy sectors in the world, and, actually, it’s gone backwards. Unfortunately, we are not as sustainable, our electricity production in New Zealand is not as renewable today as it was when they came to Government four years ago, because of all of that coal that’s coming from Indonesia. That’s a very sad thing because we could have stood on our record and been proud of what we were doing around the world.

This legislation does nothing about that. They talk about all the schemes that they want, pumped hydro, all the other things that they’re talking about, which are not in the short term and the medium term; they’re a long way away. It’s almost like Think Big all those years ago. Think Big, except the Government is not “thinking big”. They’re thinking about the next press release. They are thinking about the next slogan. They’re thinking about how to divert attention from the things they are not doing and not doing well, hoping the public doesn’t notice.

Here is the problem for the Government: every single month the electricity bill turns up and eventually those press releases, they realise, don’t help the bills to be paid. Bits of legislation like this will come to the committee and we will give a fair hearing. They won’t make one bit of difference to the blackout that’s happened this year, to the oil and gas ban. So we can’t have gas as a transitional energy source to give certainty, to the coal that’s been imported into New Zealand from Indonesia, and to the lack of new generation.

The National Party is very proud of the work that we did in Government to balance this out, to have a time line to start moving towards a sustainable energy. But we also need energy security and energy independence, and that’s something the Government has thrown out the window purely to make announcements. If this legislation was going to make it easier for consumers to give businesses certainty, to make sure that at the very least costs didn’t go up, let alone come down, we would happily support it, we’d work with the Government, but it doesn’t do this. What it does is it sets up another body to talk.

When members opposite say that they are hard-working, working is not talking and talking is not working. The only way that that builder I gave the example of earlier actually can build houses is stop talking, pick up the tools and actually do the real work. That’s what the Government needs to do when it comes to energy production in New Zealand.

The very best way to look after the consumer, if the Government doesn’t know what to do about energy, is find other ways to reduce costs on them: make sure the rents are not going up as much as they have; make sure the fuel costs are not going up; stop piling tax upon tax upon tax on the poor Kiwi household; stop bringing out new rules and regulations on businesses large and small when they struggle, so they have to pass the cost on. Because Kiwis are struggling. There is such a thing now as the hard-working poor, people that go to work every day, mums and dads, 40 hours to 80 hours a week between them, who cannot pay their bills, who have to choose between paying the bills that the Government are ramping up and feeding their kids. They’re the ones that deserve the break. They’re the ones that deserve more than a talk shop, a committee that’s going to talk to make them feel better. The way to make them feel better is bring the electricity costs down.

Kia ora, Mr Speaker, thank you. I rise to speak on the Electricity Industry Amendment Bill. A previous speaker from the other side of the House talked about how this was the Minister sticking her fingers into the gearbox. I think it’s more around the Minister ensuring that there’s a really good tool box that can be used to ensure that our electricity industry is fit for purpose, to care for people, to also, obviously, as it talks about, strengthen the consumer voice. That’s for our consumers, for our small households, for our small businesses, to ensure that they have a voice. Now, back in 2019, there was the Electricity Price Review, that talked about and explored what was going on for households and for small consumers, and they were struggling to be heard. So we are putting something in the tool box to ensure that they are heard and that they are supported.

Now, we’ve heard lots around our short speeches today, and in the words of the great Bryan Adams, “With few words one can speak the truth.” I thought that was quite good. I look forward, as a member of the Economic Development, Science and Innovation Committee, to listening to the arguments, to listening to the opportunities, the possibilities from the sector, from consumers. In the words of Florence Nightingale, “people have founded vast schemes upon a very few words.”

Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. The Green Party is supporting this bill. I note that it’s an outcome of the Electricity Price Review, which was undertaken in the previous term of Government, and many of the recommendations fit with Green Party policy, although I would say that the recommendations from that review don’t go as far as we think they should. One of the positive things about this particular bill I think will be this establishment of an agency to advocate for consumers. I think that’s definitely needed and will be worthwhile.

However, there are some things that I think are being put off until there is the establishment of the agency that could be done sooner. So, for example, Powerswitch is extremely difficult for most people who are the most vulnerable, on low incomes, to navigate, and part of the problem with Powerswitch is that it’s really difficult for the people running Powerswitch to know what particular product a consumer has from a particular electricity company. So that makes it really hard to evaluate whether they are on the best product and whether they can save money by switching to a different one.

There are some really simple changes that can be made really quickly like requiring every individual product to have a code or a number, which Powerswitch would have the information about, from all of the providers, and that that number or code be published on any electricity bill. That will make it really, really easy to give good information to consumers. I don’t think we need to wait for an agency to be established to require this, but, unfortunately, the Electricity Authority has been extremely hands-off and really hasn’t taken, I think, up the responsibilities that it has to make sure that the market is fair and working in favour of consumers.

So I think it’s great that these changes are proposed. I think it’s unfortunate that it will take some time to be implemented. It clarifies the electricity industry code to ensure changes can be made to protect the interests of households and small businesses. It makes some of the changes to enable flexibility around new technologies, like regulation of lines companies who also provide home solar panel services. And I think this could be quite useful to encourage the uptake of solar. Clearly, the status quo is not fit for purpose in this respect. We haven’t really facilitated the uptake of solar in any big way in New Zealand, and I think most people think that’s a missed opportunity. I mean, you look at countries like Germany, which have lower sunshine hours, fewer sunshine hours than New Zealand, and yet they are generating huge amounts of their electricity from solar because of really proactive Government policies that have supported that, and, of course, that is part of our transition to more renewable generation—to enable more distributed renewal generation like solar.

So I think the steps within this bill will be positive and they will have a positive impact for smaller retailers, as well. They’re a really important part of how we ensure that there is good competition and that the gen-tailers aren’t just, sort of, making massive super profits at the expense of consumers. We see that with some of the smaller changes the bill proposes, like enabling or giving the power to the Minister to directly amend the code if the Minister is not satisfied with industry behaviour. Currently, only the Electricity Authority can amend the code.

I think this is quite an interesting development and it means that some of the changes that the smaller retailers and consumer advocacy groups have been calling for to ensure that the gen-tailers are required to operate fairly can happen. So requiring transparency, for example, so that gen-tailers have to release information about internal transfers and potentially forcing them to sell a proportion of the electricity they generate on the open market, rather than trading it internally. I think those are really important powers.

I think the ideology of the 1990s in the electricity reforms was that simply by trying to create a competitive market, we would get the best outcome for consumers and lower prices, but, clearly, that has not been borne out. I think part of the problem is that maybe this would have worked in a larger market, but New Zealand is a small country and we seem to have this problem in a whole range of areas. Whether it’s supermarkets, electricity generation, banks, or building and construction, we tend to quite quickly be dominated by a few big players—somewhere between two and four—and they’re able to use their market power to extract excessive profit, and this is at the expense of consumers and businesses.

The other way that we’ve been let down by that approach is a lack of a strategic approach to transition to renewable electricity. I note that previous members in this debate have argued—and it is a tragedy—that our emissions have gone up from electricity generation because we have been burning more coal over the last few years, but this is a direct result of a lack of ability in our electricity system to have a strategic plan to deliver what’s best for New Zealand and best for New Zealand’s climate. The Green Party—Jeanette Fitzsimons—was talking about this in 2005, and probably before that, to be honest. She was working really hard on it in 2005 to 2008 as the energy efficiency and conservation spokesperson for the Government.

The Green Party has said for a long time that we need a plan to transition to renewable generation and to transition Huntly to have an alternative for baseload electricity generation that doesn’t rely on fossil fuels, and yet successive Governments ignored that, but most particularly the last National Government, because their largest change is a direct result on why we haven’t had increased renewable generation provided in recent years. The major energy users group put out a report just a few weeks ago showing that over the last 20 years, Meridian has been making excessive profits, but particularly in the last five years, since the partial privatisation of Meridian.

So it’s no surprise that if you partially privatise these sorts of companies and you’ve got private shareholders directing the behaviour of the company, they’re going to maximise short-term profits over long-term benefit to New Zealand, and that’s a direct result of National Party policy in the last National Government. You never heard them talking about a plan to reduce our reliance on coal. We never saw any investments made to have an alternative to baseload, and it’s not a problem that can be solved in one year or three years or four years, even.

This is a long-term problem that now the Government is grappling with, but it’s not a result of this Government’s policy that we’re burning more coal. It’s a result of a decade of inaction in terms of investing in renewables and setting up the type of regulation like that which is in this bill, which would have enabled the incentives so that we would have more renewable generation and we wouldn’t be so reliant on fossil fuels at the peak time.

If we’d had improvements to building standards 10 years ago, when we needed them, we wouldn’t have had so much demand in the peak of winter for electricity. So we need a long-term vision and a long-term commitment to sustainability, to climate action, and to the collective public good here in New Zealand, and that can really only be delivered by a philosophy that understands that trying to maximise profits for private individuals who happen to be investors in the electricity companies is not the way to get the best outcome for New Zealand as a whole or the climate.

So the Green Party is supporting this bill. We would support further and faster action on many of these areas to protect consumers but also to incentivise renewable generation, be that distributed or in a more centralised way.

Thank you, Mr Speaker. ACT cautiously supports this bill to select committee to hear from stakeholders and to determine which parts of this are actually needed. The aspirations sound lovely: it seeks a better functioning system with increased competition, better access for new entrants, and lower prices. So we support aspects of this bill, for instance improving the arm’s-length rules where vertically integrated businesses may have different functions such as for generation and retail distribution and that sort of thing. And it is good that the bill is addressing anti-competitive behaviour, such as excessive self-dealing when a generator sells to its own retail arm at a price that is lower than its competitors. Furthermore, the changes to the terms and conditions and the powers of the Electricity Authority appear to have minimal impact, but if they are well worded and drafted may improve the performance of the market, and the increased oversight could be justifiable.

We are, however, highly sceptical of the consumer advocacy agency, which could be a little bit of a Trojan Horse. There is a risk that such an agency will be stacked with anti-business types who will advocate for more bad Government energy policy at the expense of consumers and businesses. These are the sorts of policies that we have seen lead to power shortages, increases in wholesale electricity prices, gas shortages, record coal imports and burning, and a raft of other consequences such as manufacturers closing down and job losses as a result of high energy costs.

The Government states that consumers struggle to make their voices heard and exert influence over decisions affecting them in the electricity sector. We point out that the market already does provide consumers and enable consumers to have their voices heard, in the way that they can switch providers. There’s more than 40 to choose from, and they’re doing so at a rate of—I think it’s around—400,000 per year. So ACT does not agree with the need for this agency. We don’t believe it’ll help consumers. Rather, it will just create avenues for more quasi-Government policy promotion through offices staffed by friendly faces.

So in summary, on balance, there are sufficient positives in this bill that we want to see it at select committee to be debated and improved, and we challenge the Government majority on the select committee to actually listen to stakeholders and experts. So with that, I commend this bill to the House.

Tēnā koe, e te Mana Whakawā. Look, that was actually a good speech from a thoughtful Opposition member. Glad to see that the ACT Party is acting as a responsible Opposition in supporting this bill to select committee, and good to hear those thoughtful contributions on the competition aspects of the bill and the need to make sure that the large players, in dealing, essentially, with themselves, are subject to appropriate disciplines. And also, I must say, an excellent contribution from Julie Anne Genter as well.

Of course, we would expect the ACT Party to be concerned if there was a strong consumer voice to balance out the dominance of business interests in the electricity market, but that’s a matter that we’ll happily have a debate on at select committee. I think it’s really important that consumers don’t have a disparate voice where the strongest thing they can ever do is change from one provider to another provider. I think it’s important that they can have an organisation which is resourced to gain evidence and do research around whether or not they’re treated fairly, and that’s one of the things that this bill does. But great to see the ACT Party acting as a thoughtful Opposition in taking this to select committee for a robust discussion around these points. Kia ora, Mr Speaker.

I call the Hon Scott Simpson.

💬 Hon Scott Simpson: Is it a split call, Mr Speaker?

A split call—five minutes.

Thank you very much, Mr Speaker. This is a bill that is a solution looking for a problem. It’s typical of socialist, left-wing Governments to come up with this sort of thing where their answer to a challenge that they perceive to be real and prescient is to set up a committee—set up a committee, palm it off to a group of people who will be appointed, probably, on the basis of their political backgrounds rather than their ability, and generate daily sitting fees and the like and produce reports. And nothing will change—nothing will change. So this is something that’s become a hallmark of this socialist Labour Government, is to set up working groups, committees. That creates the sense of something happening. It creates a sense of momentum. But in practical, real terms, nothing happens, because the delivery is non-existent.

Now, this bill seeks to establish a Small Electricity Consumers Agency, and that’s the grand gesture, and—and it’s the “and” bit that’s important—empowers the Minister to amend the electricity industry participation code. That’s the bit that is the scary part, because you have, on the one hand, the grand gesture, which is to set up the warm fuzzy sounding Small Electricity Consumers Agency, which, on the surface and on the face of it, sounds very reasonable. But, actually, it’s the empowering the Minister to amend the Electricity Industry Participation Code that is the teeth within this piece of legislation. So it’s smoke and mirrors over here, and don’t look too closely at the Minister and the Government overreaching in terms of their power and control and ability to meddle and put their fingers into the marketplace and meddle in a way that they see fit. It’s, as I say, characteristic of a Government that likes to meddle on this kind of grand scale.

I’m a driver of an electric vehicle (EV) and I have been for three years. I’ve nearly done 100,000 kilometres in my 100 percent electric vehicle and I love it. One of the things that has occurred since I started driving an electric vehicle is that it’s changed my relationship and understanding of electricity as a consumer. I have found that, whereas for years and years and years, and particularly during the years when my children were teenagers and they’re going through that period of time when they seemed to use a lot more electricity than anybody else in the universe, I would just pay the power bill each month. I’d occasionally give them stern lectures about the necessity to turn off lights and unnecessary heaters and don’t have such long showers. But as I say, that’s a teenage thing, and they sort of grow out of that. They grow out of it enough when they start paying the power bills themselves, when they become consumers themselves. I’ve noticed this and I speak from my lived experience of this. They do get it eventually.

But I have found that my relationship with electricity has changed since I became an EV driver, and I’ve gone to the extent of having solar installed on my roof. I can sit in this Chamber sometimes and put on the app on my phone and see how much electricity is being generated in the beautiful Coromandel as I sit in this Chamber. What that tells me and what that little journey of electricity exploration has taught me is that actually there is much that could be done to make consumers more electricity-focused and understanding.

Now, some of that is not about setting up an agency of the sort that is proposed in this bill. Some of it is about making it easier for consumers to have a better understanding of what their electricity use is, how they can reduce their electricity consumption, how they can be more efficient, and how they can achieve a faster move to the electrification of our economy that’s going to be needed as we transition to a climate-focused world where we remove ourselves from fossil fuels. The answer to this piece of legislation is actually not to create a grand gesture, Government Labour Party type of new agency or committee or organisation. The answer is actually to just allow consumers to be more flexible, more useful, and to make it easier for people as individuals to understand what their electric electricity usage is happening.

It’s a pleasure to take a short call on the Electricity Industry Amendment Bill. It’s always a pleasure to hear that there could well be environmentalists on the other side of the House. But the point I want to make is that as well as making changes at an individual level, which is something we all must do—and I’ve recently taken up the use of an electric vehicle, but a bicycle version—we also have to make system-level changes to the electricity industry. That’s something that this side of the House believes: that when we’re making change to how we do things in this country, we need to take better choices as individuals, and we also need to be prepared to make changes to the system that will improve those systems.

This morning we’ve actually had another power outage in the South Island, thanks to a fault at a substation near my electorate of Nelson, and it just shows just how important it is that we are ready to make these changes. In this bill, in addition to the consumer advocacy agency, we’re also going to be making changes to the Electricity Authority statutory objectives to ensure that one of the new objectives is to protect consumers—is to protect against the use of monopoly powers by distributors, and including mechanisms such as ensuring that the terms and conditions between distributors and other parties are fair and reasonable.

And so it’s a pleasure to hear that the ACT Party will be supporting this bill. But on the other side of the House we hear much wailing, much gnashing of teeth about how we need to improve this sector, and when it comes to putting up legislation in front of this House, the other side of this House in the National Party decides, “Well, we want to talk about it a lot, we want to whinge about it a lot, but we actually don’t want to get up and make change.” On that note, I am fully in support of this bill and I commend it to the House.

Thank you, Mr Speaker. I’d like to be able to take a call on the Electricity Industry Amendment Bill. I just want to address a couple of comments from the other side of the House in relation to this bill. They say it’s a bill that’s looking for a problem. Well, clearly they have not actually picked the bill up off the Table to read to, because it’s very clear in the bill what it’s trying to achieve, the problems that have been set out. I quote: “Electricity consumers, particularly households and small businesses, struggle to make their voices heard and exert influence over decisions affecting them in the electricity sector.” Again: “Small electricity consumers can be vulnerable in their dealings with electricity industry”—competition, around “limiting competition to the detriment of consumers”. So there are problems that this bill is trying to resolve. This is why we’re supporting it through to the select committee, so that we can hear from submitters, hear their voices and understand what the impact is on them, both as consumers, both as retailers. So I commend this bill to the House.

Thank you, Mr Speaker. It’s very opportune that I stand to speak to this bill today in its first reading. Look, we’ve heard plenty of comments from my colleagues on this side of the House about the mess that the electricity industry is in. Actually, it’s not just the electricity industry, it’s the energy sector entirely.

It’s quite coincidental, as one of the members referred to before, that we have just experienced yet another blackout in this time and the whole of the West Coast goes out. I’d just like to read one of the updates that happened after that. It was nearly an hour following the blackout where the local power authority, Westpower, says that “All of South Westland has power restored due to local generation from Amethyst.” Now, Amethyst is a small power scheme in Westland and it’s a sister project to the Waitaha power scheme that has been sitting with the Government for a concession—originally turned down, but we continue to lobby for it to be granted. Today has given us an absolutely classic example of why places that are remote, like the West Coast, need to have local generation.

So we on the Coast were without power for about 45 minutes, but other parts were without power for an hour and a half. Does this bill help generate electricity? Does it help the energy sector to give them confidence to invest in more generation? No, it doesn’t. What it does is sets up yet another level of bureaucracy. The consumers actually don’t care about that level of democracy, and we think that we’re going to do those small users, small businesses, private individuals a favour by having another level of bureaucracy!

But guess how it’s going to be funded? That’s right. There will be a levy. There will be a levy paid by consumers to fund this new level of bureaucracy. And where does that cost fall? It falls back on the consumers, the very people that the Government assumes it’s going to be helping. But in actual fact, they are going to create another layer of cost, but we don’t know what that cost is going to be. And the reason we don’t know, and I’ll read it out of the debate notes on this bill, is because, it says, “The analysis of costs and benefits and of safeguards is incomplete around [a couple of] … proposals.” One of them is “to: extend the Electricity Authority’s power to regulate monopoly businesses’ involvement in emerging contestable markets; and to provide a regulatory ‘back-stop’ mechanism.” And it even says, in the recommendations from the Ministry of Business Innovation and Employment (MBIE), the recommendations to the Minister, “that MBIE do further analysis of these two proposals and update the RIA prior to tabling legislation in Parliament.”

Did that happen? No, it did not happen. This bill is incomplete. It has not got the assessment that is required to make a decision on implementing policy unless the costs and the safeguards have been completely analysed. And so once again, we’ve got the Government looking for sound bites in the media to make it look like they’re doing stuff. But actually ask the people on the West Coast this morning what they would rather have. Would they rather have another bureaucratic body set up that they are going to have to fund or would they rather have the lights stay on when they turn the switch? I think I know what the answer to that would be.

There’s been a few comments made, and I refer to one that my colleague Barbara Kuriger made this morning, saying that the Minister stuck her finger in the gearbox. Actually, I think she stuck her fist in the turbine, because what she’s doing is grinding the energy market in this country backwards. And it’s very clear to see, because we’ve got our “clean, green” and our “nuclear moment” philosophy from this Government, and they’re the very people who are importing coal at record numbers. Last year, in 2020, over a million tonnes of coal were imported into New Zealand, and in the first quarter of 2021, that number has been 300,000 tonnes of coal. So for a “nuclear moment”, we are actually going backwards.

I think the Government has its priorities completely back to front if they think having this bureaucracy set up is going to make any difference to electricity security or energy security in this country. And according to the preparation I did for this bill, the Minister still hasn’t completely explained why it’s necessary to set up a Small Electricity Consumers Agency rather than boost what we’ve already got, which is the Commerce Commission. So why isn’t the Commerce Commission charged with being a voice for small businesses and for domestic users? They’re the very people with the skills. They’ve already got an established system in place, and the Minister could quite easily ask them or instruct them and fund them to undertake the work to be that voice for small business and domestic users.

Basically what MBIE was saying too, in their preparation for this, is that MBIE does not consider the cost as being worth the benefit. Isn’t that interesting. So when we’re told by the Government that they always follow best advice, and that’s always their fall-back position for some of the decisions that they make—yet when they don’t want to listen to that expert advice, they completely ignore it. And we’ve got now MBIE themselves saying that they do not consider the cost of this new body to be set up, the Small Electricity Consumers Agency, as being worth the benefit.

And one other thing that this bill is going to do is it’s going to give the Minister powers to intervene. At the moment, we have almost an arm’s length relationship there. And that separation between the Electricity Authority—and they are an independent entity—and the Minister has to be respected. But once again, we’ve got this Government overreaching and sticking its fist in the turbines and grinding things to a halt, because they are continually of the belief that they know best. Well, we’ve seen the disaster that that’s creating in this country, and the energy sector is now facing enough issues of its own without having the Minister spooking the sector yet again. If you think about the spontaneous decision that happened to stop oil and gas exploration in this country, it spooked the investors and they’re gone. And even though we might say we’ll unwind that decision, actually the investment has gone with them. So there are a lot of things that cannot be undone once the mistakes have been made.

But the other one that has spooked the industry is the announcement of the Onslow project. Now, the Onslow project is touted as being New Zealand’s answer to electricity shortages and security of supply. So we’ve got a body of eight people set up; that’s the expert advisory group. Twenty-five percent of that group comprises of an activist from Greenpeace and the person that set up the School Strike 4 Climate. They are part of a $300 million budget, providing expert technical advice on a multi-billion dollar project. It just beggars belief to think that we are relying on such input to make major investment decisions for this country.

So while we’ve got the Government over here on one hand saying, “We’ve got the answer; we’re investing hundreds of millions of dollars into a feasibility project.” and, on the other hand, we’ve got potential investors saying, “We don’t need to do anything because the Government’s in competition with us and we’ll just leave it to them.”, who misses out? The consumer.

Order! The member’s time has expired.

There was a time members in this House actually could have advocated on behalf of consumers. However, because the electricity reforms were meant to introduce competition, which was meant to bring prices down, the opposite happened, because the generators and the retailers, particularly the generators, have got an incentive to keep the electricity supply absolutely at the margins, and that’s why we are seeing the major outages we have. What this bill does is strengthen the Electricity Authority’s ability to actually advocate on behalf of consumers in a way that members in this House once did. It is very good legislation, it is necessary legislation, and I do congratulate the ACT Party for their support, because they have seen through what this is doing. I commend this to the House.

Members, that concludes the extended sitting. The House is adjourned until 2 p.m. today.

The House adjourned at 12.57 p.m. (Thursday)