Employers and Manufacturers Association (EMA) Northern - Flawed electricity plan will hit Kiwi families and businesses

Flawed electricity plan will hit Kiwi families and businesses

13 Sep 2016
A group of businesses, local government and electricity sector participants has come out in support of a legal challenge to the Electricity Authority, set down for tomorrow.
The group comprises Ashburton District Council, Auckland Chamber of Commerce, Counties Power, Counties Power Consumer Trust, EA Networks, EMA, Entrust, Auckland Federated Farmers, Northpower, Norske Skog, Top Energy and Vector.
Utility retailer and electricity generator Trustpower has asked for a judicial review of the consultation process used by the Authority in a review of how the national grid is paid for.
“The Electricity Authority’s proposals to change the way households and businesses pay for their electricity are being rushed through by stealth before Christmas,” says Kim Campbell, a spokesperson for the group.
“The plan as it stands will have a devastating impact on some of our most vulnerable communities.  Not only will some face a big new increase in their power bills, but others will face the possibility of losing their jobs if their employers cannot afford to stay operating,” says Mr Campbell.
“The Electricity Authority has said it could take years to figure out the true of cost of the changes for business and communities. That’s just not good enough. That data needs to be made clear before decisions are made, and all affected communities need to be properly consulted.
“The proposals are divisive. They pit region against region, business against business and community against community. The Authority cleverly suggests there are always winners and losers in these processes – but the only real winners are the Tiwai Pt smelter and Meridian Energy.  In fact, Meridian has joined the court proceedings with the sole purpose of supporting the process. This is not surprising given how much they stand to gain: Meridian by over $57 million[i] every year and Pacific Aluminium by over $20 million every year, being money out of the pockets of homes and businesses in large parts of New Zealand straight to the shareholders of these companies,” he says..
“In 2012, the Authority disbanded an industry working group looking at the issue, so those who could’ve given expert advice were shut out. It has not commissioned any independent expert reviews of the merits of its proposals, and not engaged fully with the expert evidence provided by submitters. No cross-submissions have been allowed, and there is no regulatory right of appeal. This is bad regulatory process, in marked contrast to how the Commerce Commission operates.
“And providing just ten weeks to evaluate a plan to overhaul nearly a billion dollars of electricity sector charges, over the same period as affected parties were working through other significant regulatory reviews, is further proof of a rushed and flawed approach.
“The Electricity Authority needs to press pause on this. A significant proportion of the industry still don’t agree there is a problem that needs solving. This is a once-in-a-generation change and for the sake of Kiwi consumers, they can’t afford to make mistakes,” says Mr Campbell.

[i] Annual dollar impacts are set out on pages 223 & 224, Transmission Pricing Methodology: Issues and Proposal, Second Issues Paper. Published by the Electricity Authority 17 May 2016.

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