Government fiddling while elderly freeze

Auckland (April 29) – The Auckland Energy Consumer Trust says the government needs to urgently review current laws that prevent electricity network owners like the AECT from investing in the electricity generation industry.

AECT chair Karen Sherry said the government is fiddling around with short-term measures to resolve an electricity crisis that requires a long-term investment approach. Her call for a legislative rethink comes as the Government’s Winter Power Task Force has doubled its target for power usage reductions. The AECT is New Zealand’s largest consumer trust, with $2.8 billion of electricity transmission assets around the country, but it is prevented by law from investing in generation assets.

“The government owns 68 percent, or nearly three quarters, of New Zealand’s generation assets and is obviously benefiting from high market prices. Its solution to a supply crisis that it has created is to tell the elderly to turn their heaters off, a response that is becoming all too familiar during a dry winter,” Ms Sherry said

“If the state-owned electricity generators are not prepared to invest in new plant, then we say the government should change the current law and allow community energy trusts to consider doing so,” she said.

Ms Sherry said it is ironic the government is prepared to spend millions of dollars on an advertising and public relations campaign to get people to switch off their heaters, but it is not prepared to let organisations like the AECT consider investing in the necessary new generation facilities.

The government is apparently concerned that because electricity networks, or lines companies, are monopolies, their ownership of generation assets as well would lead to price manipulation. “Under the current arrangement the government-owned generators are pocketing most of the profits in the generation sector – which in the six months to the end of December earned them over $203 million. Compare that with electricity lines company VECTOR, which is wholly owned by AECT, and actually dropped its prices by $120 million last year,” she said.

Ms Sherry said consumers should not have to double their efforts to save power to support an industry that does not encourage new capital investment for either generation or transmission.

“It is ironic that the government , which owns most of the generator/retailing companies is prepared to regulate to protect itself and exclude from the generating industry organisations that can help avert a future crisis.”

“What we need is investment in the industry, and the government should be encouraging organisations like the AECT to put money where the need is,” she said.

Instead, the government’s inaction threatens to cause power shortages and potentially reduce the income of consumer trusts like the AECT.

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