Time to halt flawed, ideological electricity grid pricing proposal

You know your proposal has probably got something seriously wrong with it when you have councils, lines companies, businesses, chambers of commerce, Federated Farmers and the Green Party opposed. Does the Electricity Authority know it though?


Tiwai Point aluminum smelter

Today, a group of businesses, local government and electricity sector participants has come out in support of a legal challenge to the Electricity Authority (EA) on its Transmission Pricing Methodology, calling for a pause. The Greens agree and we came out very strongly against the EA’s proposal for how we price and pay for the national electricity grid. The EA’s proposal would mean people in 14 regions including Northland and Auckland would face bigger power bills, while the Tiwai smelter would benefit by $20 million, and the smelter and other big businesses would be able to apply for special new discounts.

Today’s statement says

“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. 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.”

Green energy spokesperson Gareth Hughes visits a home powered by solar panels

Green energy spokesperson Gareth Hughes visits a home powered by solar panels

This week I also met with the Independent Electricity Generators Association, who are terribly worried about the proposed changes to payments for small-scale distributed electricity generation, such as local windfarms, small hydro dams, and solar generation.

They see 80 years of rules to reduce transmission costs with local generation ripped up and thrown on a bonfire of economic theory, which is unleashing massive uncertainty for investors. At a time when the world is moving towards localised, efficient, clean generation, perversely we could see these shut down in New Zealand.

The EA needs to listen to the diverse groups opposed to its plans and go back to the drawing board. We can have a cleaner, cheaper electricity grid and smarter pricing structures, but not built on the backs of struggling consumers and businesses.

Green Party energy spokesperson Gareth Hughes at Meridian's the West Wind farm

Green Party energy spokesperson Gareth Hughes at Meridian’s West Wind farm