Gordon Campbell on electricity pricing and Aleppo

If the Reserve Bank has seemed this week like a ghost of the 1990s trying to re-discover its interest rate mojo, the Electricity Authority seems to be hellbent on a 1980s revival. You know, the days when the New Wave Monetary Romantics like Roger Douglas and Richard Prebble would force their loony ideas on the rest of us, regardless of the social consequences - just because it looked like a more “efficient” way of doing things. Everyone, back then, was inhaling the amyl nitrate of free market economics. It was so exciting.

Similarly, the Electricity Authority has decided that its not a good idea in a small country like New Zealand, for all of us to contribute a small but equal amount to the cost of the national grid, for the general good. No, no… far more ‘efficient’ to break these costs down into regional formulas in terms of proximity to the power sources and transmission lines. That way, you will always create winners (who surely deserve to be rewarded by the gods of the market) and losers, who just as surely deserve to be cast into the outer darkness. Literally, in this case.

Most South Islanders for instance, will be winners under the Authority’s proposed regime for transmission pricing – well, apart from those losers on the West Coast – and so will the Tiwai Point aluminum smelter, which will get a $50 million handout. Strange how efficiency can be bent to serve happy political outcomes, for governments and multinationals alike.

Uh oh. But then there’s the East Cape, whose entire regional economy will be pushed off a cliff.

Apparently, the proposed new pricing regime will impose energy costs on the Kawerau mill that will be at least double – and by some estimates, quadruple – the entire $3.2 annual profits of the Kawerau mill operations last year. Besides the mill’s jobs and incomes now placed in jeopardy at the stroke of the Authority‘s pen, there is a whole eco-system of traders and retailers who stand to be directly and indirectly affected by a mill shutdown. Of course, back in the 1980s, the fourth Labour government would routinely flick such concerns aside as the inevitable cost of progress. Thirty years on, we’re still paying for the social costs of those experiments conducted on vulnerable communities.

Surely we’re wiser than that now though, aren’t we? These pricing proposals seem like a terrible answer to a non-existent problem. The life cycle of the national grid should not be artificially extended by such socially ruinous means. The formulas being proposed will milk the last drops of grid profits from people least able to afford the emerging alternatives. In the meantime, what the Electricity Authority is proposing may well look “efficient” on paper, but these pricing formulas bid to create havoc in real communities on the West Coast, in Northland, in parts of Auckland, and on the East Cape, for starters. Ultimately, we all pay the cost of that.

Aleppo, On Repeat

Small announcement, big implications. A few weeks ago, the other major Islamic fundamentalist group involved in the Syrian cicil war – Jabhat al Nusra – changed its name.

It also said that while it retained a lot of respect for its al Qaeda mentors, it would no longer be formally linked to them. Yeah right. Well, the current fighting in East Aleppo (and related spike in civilian casualties involved) explains why. Reportedly, the siege mounted in recent months around East Aleppo by the Assad regime (and its Russian and Iranian allies) has just been broken by the jihadi rebels, thanks in good part to a new generation of weaponry (ie, GRAD batteries) supplied by Turkey and the Americans.

That’s right. The Americans, al Qaeda’s minions and the autocratic regime in Turkey are fighting on the same side in Syria. It does explain the need for Jabhat al Nusra’s cosmetic name change, and for the nominal severing of its ties with al Qaeda. For obvious reasons, the White House wouldn’t want Donald Trump to be able to say that the US is arming al Qaeda, right? (And thereby causing the humanitarian disaster now unfolding in Aleppo.) This is entirely in accord with US policy, which has always favoured a bloody Syrian stalemate – in which neither side wins – as being the most desirable solution of all the bad options on the table. Thus, the US shares intelligence with the Russians to co-ordinate bombing operations against Jabhat al Nusra, while also arming it on the ground.

East Aleppo is, reportedly, the poorer side of town. As Juan Cole has pointed out, if the Assad regime had succeeded in taking it, thousands of jihadi fighters and their alleged supporters would almost certainly have been massacred by the regime, in retribution. West Aleppo on the other hand is wealthier, and at least nominally supports the Assad regime. The risk, as Cole also points out, is that now that the siege of East Aleppo has been broken, the jihadi rebels may well turn their attention to the wealthy West side of town. (In the recent fighting, only the Hizbollah forces linked to Iran stood their ground against the rebels.) If a rebel offensive proved successful, thousands of people in West Aleppo would then be at risk of being massacred. The US seems likely to rationalize such an outcome as a welcome setback to Russian and Iranian aspirations. And so – like one of those horrific trench warfare battles on the Western Front in WWI – the endless carnage by proxy in Syria seems set to continue.

Power, People

Eugene Record and the Chi-Lites were singing about a different kind of power, but this song would still be a pretty relevant submission to the Electricity Authority.

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