What Business Needs - Electricity Crisis Meeting
What Business Needs From Today's Electricity Crisis Meeting
Business New Zealand Chief Executive Simon Carlaw says businesses have some key outcomes they want from today's electricity crisis meeting.
The first is information. There is a lack of transparency in the generators' price-setting process, with no adequate explanation for the recent extreme spikes in spot prices. Decisions to push up prices by hundreds of percentage points at short notice need more justification than is currently given.
The second is a plan of action to deal with the current crisis now. With the good will of all players, this is possible. Droughts impacting elsewhere have been successfully managed by the involvement and contribution of many sectors.
Thirdly, we need to start looking longer term at the structure of the energy market, so we don't get into this mess every time there's a dry winter. We don't want price controls - that leads to situations like in California. But we do want an improvement to the electricity market structure.
The electricity reforms need to be revisited with the full force of hindsight. There are now fewer players than the structure was designed for, and the way the market is operating at present is not what the economy needs. There are a number of possibilities for getting better competition in the electricity market, and today's meeting should start considering them.