Experts: Power reforms wasteful, expensive

Written By: - Date published: 1:10 pm, December 11th, 2009 - 18 comments
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Associate Professor Earl Bardsley, Waikato University:

taking Tekapo A and B power stations from Meridian and giving them to Genesis means Meridian must now rely on a rival company, through some kind of protocol, to provide a significant amount of the water inflow to Lake Pukaki, which supplies Meridian’s line of Waitaki River power stations.

The hope is that this market device will give better security against dry years. In reality, it may lead instead to increased electricity wastage through more conservative operation of the main hydro lakes

But any large summer floods will then flow into already-high lakes and create spill losses at all the downstream power stations. Even without the impact of the reforms there was considerable water spill earlier this year in the South Island, representing both lost power and lost water resource that might have gone to irrigation.

Powershop chief executive Ari Sargent:

“Tekapo can control the water available to generate electricity through the entire Waitaki system, made up of eight separate hydro lakes

“It is illogical to reduce the co-ordination between the Waitaki catchments and completely reckless to provide commercial incentives to a single supplier who has the power to restrict water to the rest of the catchments.

“This puts the security of supply at risk and will see a change in river operation that will increase wholesale prices and prices to consumers, particularly in the South Island. It certainly gives Genesis opportunities to gain.”

It was also “utterly illogical” to make retailers pay customers during conservation campaigns or power cuts. Retailers had no control over security of supply and the onus needed to be on generators to pay compensation.

It sniffs like major reform for reform’s sake. I don’t think they’ve got a clear idea of the benefits versus the risks.

Analysts pick holes in reforms
Former Electricity Commissioner questions reforms
Plan to split Waitaki “silly” – former manager of scheme

Gerry Brownlee when asked if he would resign if power prices continue to rise: “No”

18 comments on “Experts: Power reforms wasteful, expensive ”

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  1. mickysavage 1
    11 December 2009 at 1:30 pm

    This particular reform is really hard to understand. Imagine the increased buracracy involved in two power companies sorting out how the water is going to be used and the flow controlled.

    Can you imagine the controller of the flow working in the best of interests of both companies or indeed of the country?

    I agree that they do not have a clear idea of the benefits versus the risks. But it is Brownlee after all.

    • Draco T Bastard 1.1
      11 December 2009 at 3:51 pm

      Typical for NACT is the increase of bureaucracy as it’s systemic to competition. As far as energy supply goes (and telecoms, rail etc, etc), more competition = more costs = higher prices.

      NACT follow and are disciples of a theory that doesn’t work.

    • tf 1.2
      11 December 2009 at 5:00 pm

      Brownlee
      The fat controller ?

  2. tc 2
    11 December 2009 at 1:33 pm

    as the nats see it, damm that meridian for having a sustainable power profile and using it as a selling feature…….lets fix that shall we.

    If we break something else never mind the big picture is to remove sustainability…job done.

    The Montgomery Burns of NZ politics strikes again…way to go Gerry.

  3. Jim McDonald 3
    11 December 2009 at 2:26 pm

    In the run-up to Christmas, Brownlee takes us all on the Merry-Go-Round Electricity Reform. Are you feeling as merry? Welcome back, Bradford, with a double dose.

    Brownlee’s confidence in the changes are such that he has already proactively, pre-emptively and unilaterally disclaimed accountability for the outcome of the shake-up: listen to http://podcast.radionz.co.nz/mnr/mnr-20091210-0809-Gerry_Brownlee_on_Energy_Reforms-048.mp3

    Brownlee: Power Without Accountability

  4. factchecker 4
    11 December 2009 at 2:30 pm

    its odd that these reforms were recommended by experts. how do you explain that?

  5. randal 5
    11 December 2009 at 2:32 pm

    factchecker.
    easy; just look at who gets share parcels for christmas.
    hehehehehehe.

  6. prism 6
    11 December 2009 at 2:39 pm

    Brownlee obviously thinks he has the magic touch and can wave his wand over the electricity portfolio muttering the incantation – competition, competition, competition. But when it comes to magic and bumbling in the right direction he isn’t a patch on Terry Pratchett’s Rincewind. That semi-magician is much clearer and faster at decision-making in dubious circumstances, and Rincewind has the Luggage to back him up, what has Brownlee got? Why was he put in charge of electricity?

    • outofbed 6.1
      11 December 2009 at 3:58 pm

      Why was he put in charge of electricity?
      Why wasTolley put in charge of education?

      lack of talent perhaps ?

  7. Zaphod Beeblebrox 7
    11 December 2009 at 3:53 pm

    Brownlee has very few opportunities to get noticed these days, so I’m not surprised he’s trying to push himself forward on this.

    Anyone know what his Economic Development Ministry actually achieve?

    Up in Auckland apart from the Queen’s Wharf competition they’ve done SFA. Given that this region has 1/3 of the people and 40% of the economic activity this is pretty damning.

    Truly, I’d be happy if he were up here announcing some initiatives- but I guess that is too much to ask for. Together with his invisibility up here and Hide’s determination to take out our Local government’s capacity to create anything, it seems government support for development north of the Bombay’s has been pretty well put to the sword.

  8. Clarke 8
    11 December 2009 at 4:38 pm

    Truly, I’d be happy if he were up here announcing some initiatives- but I guess that is too much to ask for.

    The precursor to initiatives is sensible ideas, which is where Gerry seems to stall ….

  9. Jim McDonald 9
    11 December 2009 at 4:47 pm

    The buck stops with Brownlee who is the Minister.
    Otherwise, it would be power without accountability.

    • Zaphod Beeblebrox 9.1
      11 December 2009 at 4:57 pm

      Don’t worry, when he retires, I am sure he will get a gig on the NZRU. he would be perfect.

  10. Steve 10
    12 December 2009 at 5:20 pm

    Wow, if you insist on quoting “experts”, please try and ensure they are at least somewhat impartial. Powershop was founded by Meridian. To quote Wikipedia:

    “History
    Meridian traditionally had been a major electricity generator, but only a small retailer. In 2006, Ari Sargent, an electricity industry veteran, had an idea to increase Meridian’s market share in the retail market: turn electricity from an utility into a consumer good. Initially, it was planned to sell electricity tokens in supermarkets, but this idea was scrapped due to cost and they turned the idea to the internet.

    Sargent, together with Simon Coley, a design specialist, founded Powershop in September 2007.”
    Link: http://en.wikipedia.org/wiki/Powershop

    They even plug them on the Powershop website:
    “With backing from Meridian Energy, one of New Zealand’s largest and most experienced energy suppliers, we’ve put the power back in customers’ hands, creating a marketplace where energy suppliers compete on price and brand values.”
    Link: http://www.powershop.co.nz/about-us.html

    Hardly the objective source he has been parading to be over the past few days …

  11. Draco T Bastard 11
    14 December 2009 at 8:58 pm

    http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10615320

    Try telling that to the millions of New Zealanders who have benefited from competition in another utility industry, telecommunications. Clearly, the task is to provide the setting for competition to flourish.

    /facepalm

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