Canterbury Manufacturers’ Association
Media Release – 20 February 2007.

HVDC Link – keeping the lights on

The Canterbury Manufacturers’ Association says that the dispute over who should pay for the Cook Strait electricity cable is more about wealth transfer than keeping the lights on.

“The politics of who pays for what is capturing all the attention”, says Chief Executive John Walley. “New Zealand’s electricity system is facing serious problems, however rather than find low cost, high quality solutions, key players are trying to pass the buck on costs much harder than they are trying to save the consumer money on their power bills”.

“The Electricity Commission directed that the cost of the Cook Strait cables allocated to Meridian Energy. The CMA believes all generators should carry the cost on a net flow basis rather than dump it all on Meridian. However the argument to dump it back onto the consumer, buried in the line charge, is a simple wealth transfer, or put another way, a tax by stealth via Meridian’s dividends”, says Mr. Walley.

“The real problems go deep. One of the HVDC links is ancient in technology terms, and the links are not even classified as a critical “keep the lights on” part of our transmission system. New Zealand’s electricity system operates on ‘just-in-time’ basis and the focus on cost swapping simply takes the attention away from the real game as ‘just-in-time’ planning that becomes a ‘just-to-late’ reality. One of the cables is 40 years old and if it fails it will be months before it can be replaced. The consumer need for a reliable, low cost electricity system in the years ahead is being lost in these sideshows.

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