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Independent Head For Winter Power Task Force

Grid Security Committee

3 April 2003

Independent Head For Winter Power Task Force

Former electricity industry chief executive Patrick Strange will assume responsibility for a co-ordinated industry response to the possibility of power shortages this winter, the chairman of the Grid Security Committee, David Caygill, announced today.

“Patrick Strange is very familiar with the electricity sector. He brings considerable knowledge and expertise to the important role of ensuring that all possible steps are taken to ensure that the chances of actual shortages of supply this winter are minimised,” said Mr Caygill.

“Importantly, he has the confidence and support of all sectors – from electricity generators through to representatives of large and small consumers.”

The Grid Security Committee, which includes senior representatives from the generation, retail, transmission and distribution sectors, as well as major industrial users, announced last week it would assume responsibility for co-ordinating the response to potential electricity shortages this winter.

Dr Strange stepped down as Chief Executive of New Zealand’s principal electricity lines company, VECTOR, at the end of last year. Prior to joining VECTOR, he was an executive with Fletcher Challenge in the New Zealand energy and electricity generation sector, and has an indepth knowledge of the industry.

While the circumstances are quite different, Dr Strange’s stewardship of the 1998 Auckland central city power crisis gives him additional experience for this role, said Mr Caygill.

“Patrick has first-hand experience of working with the industry and consumers to take joint action during a period of difficulty.”

Dr Strange said he had accepted the challenge of coordinating the electricity industry’s actions in the lead-up to winter.

“There are two things we must do – help the industry maximise the amount of electricity it can produce this winter and encourage all consumers, large and small, to use that electricity as efficiently as we can.

“While there is justifiable anxiety about the potential for winter power shortages, it is important to take a properly planned approach to conservation and efficiency efforts,” he said. “We will be working with lines companies and electricity retailers over coming days to develop a graduated plan of action, early elements of which are already becoming visible.

“It is only early April. On balance, it is possible that autumn rains will fill the hydro lakes sufficiently before winter to avert any shortfall. However, we cannot rely on that and it is prudent to take steps now, not least to minimise the impact on major users already under pressure from spot prices.

“What makes this year different is that there are fewer options open to us as a country than in the past if we don’t get the autumn and early winter rain.

“The changed outlook for Maui gas has removed a safety valve the industry previously had. ”

Dr Strange emphasised that his focus was on minimising the possibility of shortfall this winter and that he would not be engaging in any wider debates about the appropriate structure of the electricity market.

“That is an important public policy debate with a long term focus.

“However, analysing what happened last year, or what we should do next year doesn’t help us for winter 2003. We need to separate the two matters.”

Dr Strange said he was forming a tightly focused team to work on the issues, drawing heavily on existing workstreams established by the Winter Power Steering Group. Further announcements would be made as the work plan took shape.

“We are working with a real sense of urgency so that we can support an escalated savings campaign if the dry weather continues. For the moment, we simply urge people to take reasonable, cost-saving steps to conserve energy at this stage and we will be working through the industry to help people do this.”

The chief executive of the Consumers’ Institute, David Russell, the chief executive of the Energy Efficiency and Conservation Authority, Heather Staley, and executive director of the Major Electricity Users Group Ralph Matthes welcomed Dr Strange’s appointment and the formation of the Task Force.

“This body has an important job to do,” said Mr Russell. “Its role must be above the politics that swirls inevitably around the electricity sector and concentrate instead on ensuring that electricity consumers have clear messages about what they can do to conserve electricity and an explanation of why that is necessary.”

“Dr Strange’s appointment is timely,” said Ms Staley. “There are enough signs accumulating of potential supply difficulties this winter to make it clearly worthwhile. It also provides a fantastic opportunity for people to learn new, energy and money-saving habits of lasting value.”

Mr Matthes said a co-ordinated approach was necessary to minimise the impact on the economy as a whole. “Although industrial users are bearing the pain of higher prices at this point, the issue could potentially affect all electricity users and a co-ordinated approach is the best way to minimise the impact of any shortfall.”


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