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Green power

Written By: - Date published: 12:34 pm, April 20th, 2017 - 78 comments
Categories: energy, greens, health, sustainability - Tags: , , , , ,

Lots to like in The Greens’ new power policy (Stacey Kirk on Stuff):

Power bill subsidies for lower-income families, under Greens’ power policy

More than half a million houses will have their winter power bills partially paid for under a new Green Party policy to slash bills by up to $300 a year.

The “Winter Warm Up” payments were one part of a new Green Party power policy, unveiled today. The party has also set a goal for 100 per cent renewable energy by 2030, and new rules to encourage competition and transparency within the electricity industry.

Released by co-leader James Shaw and the party’s energy spokesman Gareth Hughes, the policy would commit $112 million for bill subsidies and require New Zealand’s 29 lines companies to consider joint ventures and mergers.

“It is unacceptable that so many Kiwi families are getting sick because they can’t afford to switch the heater on,” Hughes said.

“Setting a goal for 100 per cent renewable electricity generation is bold, achievable and the right thing to do for our planet.” …

78 comments on “Green power ”

  1. Enough is Enough 1

    Lots to like about this policy and actually almost every Green policy.

    The great thing about the Green policy machine is they almost always lead with new ideas. The result being that those ideas become common cross party policy as Labour inevitably ends up adopting a very similar if not identical position.

  2. timeforacupoftea 2

    Yes.
    Thank goodness , a few free bags of Kia coal for the oldies will be welcome down here.

  3. Antoine 3

    The bill subsidy thing just seems like a dressed up welfare payment (that some people will miss out on – those off-grid, those living in retirement homes, etc etc).

    Also, if it’s a per-household payment, it won’t be much (on a per-person basis) for people living in large households.

    A.

    • McFlock 3.1

      Well, it’s only designed to take the edge off winter price hikes. And power bills are per household anyway. Oh, and yes, it’s to help the poor, so of course it’s part of a welfare system. It doesn’t pretend to be otherwise – it just helps them with power bills by adding predictability to the winter months.

      edit: do off-gridders and folks in retirement homes get inflated per-unit power bills every winter?

    • weka 3.2

      Yes, in a social democracy with a functional welfare system, the state provides support to people who are struggling. I know it’s not fashionable amongst the neoliberal set, but this is exactly why some of us vote Green.

      I also get that neolibs think welfare is about giving people money, and ain’t that unfair. But it’s not what welfare is, it’s about alleviating poverty. If you read the GP policy you will see that the point is to create health for vulnerable people, not give them money. In that sense people in old people’s homes are not losing out because they’re not getting cash, they’re already living in adequately heated and insulated homes.

      Further, welfare is about the wellbeing of the whole community, not about making sure that every individual get goodies. Sorry you can’t find anything genuine to critique in the policy, that sucks if you have an agenda of undermining the left.

      • Antoine 3.2.1

        @weka

        To be clear, I’m not saying ‘don’t do it’. Rather:

        (a) if you just want to do the Robin Hood thing and take from the rich to give to the poor, then you might as well do it through the tax and welfare systems rather than messing round with the power system, but
        (b) if you actually want people to stay warmer in winter, then you’d do better to reduce the per-unit charge on homes. This will actually incentivise people to use more power (of course, it will also increase greenhouse emissions in the short term, you can’t have your cake and eat it too). You also need to reduce the cost of gas, coal and firewood over the winter months as not everyone heats with electricity.

        The proposed policy is an awkward halfway house between the above.

        A.

        • Sacha 3.2.1.1

          “if you actually want people to stay warmer in winter, then you’d do better to reduce the per-unit charge on homes.”

          Which is hard to do with a privatised market system, you’d agree. Max Bradford has a lot to answer for.

    • I’m pretty sure it’s a quite transparent welfare payment.

      It’s intended for winter heating so your related costs shouldn’t vary based on occupancy, but rather on the size and design of your accomodation.

      I’m not sure there’s a huge amount of people earning under $50k that live off-grid. There would certainly be details to cover on whether the subsidy applied to retirement homes or retirement villages, but I imagine it probably would.

    • AmaKiwi 3.4

      Antoine, I will not argue the economics of the Green’s proposed payments system.

      But from a cost/benefit analysis point of view, inadequate winter heating costs us far more in medical bills, lost work, and spreading illnesses than any subsidies.

      • Antoine 3.4.1

        RIght, but the subsidy won’t incentivise people to use more power in winter. They get the payment whether they use more power or not. So there should be no health benefits.

        • Sacha 3.4.1.1

          Organisations who work with poor and older people consistently report that cost stops those people from heating their homes as much as they otherwise would, which feeds into respiratory and other illnesses. So yes, it will make a difference, straight away.

    • mauī 3.5

      “seems like a dressed up welfare payment”

      God forbid another welfare payment! You know the economy is stuffed when people need help to afford the basics like power and a roof over their head.

    • Antoine 3.6

      Afterthought – the proposed policy is also useless for households with income of $50,001 and seven cold children

      A.

      • The Chairman 3.6.1

        Yes, while I largely support the sentiment, its delivery requires more thought.
        Moreover, the amount proposed should be higher.

  4. DoublePlusGood 4

    Really should just nationalise the whole power system though. It’s fundamental infrastructure.

    • Ch_ch chiquita 4.1

      Agreed. And run it at cost cover with no profit and all of us will be better off.

    • tc 4.2

      +100
      The billions of waste in duplicated systems and ticket clipping and audit/regulatory bs across all 4 layers would payback the funds needed to remove the rent seekers national introduced within a few terms.

    • NZ Power was a good policy proposal to control power prices without sinking the required capital for re-nationalisation. I’m actually a bit surprised they dropped the policy.

      I don’t think competition has really provided anything meaningful to the electricity market so nationalisation seems like a good idea in principle, but it would depend on the details. I honestly can’t see the current Labour Party supporting it, sadly.

      • tc 4.3.1

        Competition is a red herring , always was bs.

        Power is a natural monopoly in a country of our size with the large hydro schemes we have. Kiwis power bills are lining foreign pockets and not reinvesting or strengthening the network.

        Apartments blocks in akl dont have power as vector hasn’t provided the capacity and it took over a decade to get diversity into akl cbd.

        Its an abject failure and if it wasnt superbly built by the old NZED and would’ve failed all over nz if not for the old school robust engineering approach they had.

        nationals bradford reforms just allowed the ticket clippers in, weve regressed across the board relative to our population.

        • Gosman 4.3.1.1

          What is a ‘natural monopoly’? This just seems like a term dreamed up by lefties as an excuse to nationalise businesses. I’m sure a case could be made that Telecommunications, Banking, Supermarkets, Agricultural services and marketing are all natural monopolies and therefore should be controlled by the State.

          • Andre 4.3.1.1.1

            Google is your friend, Gosman. It’s very use to use. In the meantime, the link below is the second result from a five-second search.

            http://www.investopedia.com/terms/n/natural_monopoly.asp

          • left_forward 4.3.1.1.2

            Given the State’s huge investment in telecommunications infrastructure in recent years (because the private sector has failed to do so), then the answer to your implied question is obvious. Collectively, we have also had to bail out and protect privatised banks, more than once since the 1980’s.
            This was because we needed to protect or build infrastructure required for the collective good – the private sector just doesn’t respond in this way.

          • AmaKiwi 4.3.1.1.3

            “just nationalise the whole power system”

            My dividends! My dividends! Why should I bother to get rich if you won’t let me use my wealth to get richer?

            (obviously said sarcastically)

            • Gosman 4.3.1.1.3.1

              Unless you are advocating nationalisation without compensation then it really doesn’t matter to the owners. They will just use their capital in a different way. The problem is for the long term health of the nationalised business as they will struggle to get capital for expansion.

          • Ad 4.3.1.1.4

            “…and therefore should be better regulated with anticartel legislation, and a more aggressive Commerce Commission.”

            FIFY

          • Matthew Whitehead 4.3.1.1.5

            You honestly don’t think there’s a situation where the fixed costs/redundancies to setting up a competitor can exceed the efficiencies gained through competition? We all know that fixed costs can cause diseconomies of scale to business expansion, I don’t see why it wouldn’t be the same in terms of sector competition. Where such a natural monopoly emerges the only rational policy decision is to nationalise for the benefit of the end-user, or do you disagree that we should take the most efficient course? That’s how your lot have been arguing for privatisation all this time, or are you admitting that it was purely ideological? 😉

        • Yeah I don’t disagree with anything you’re saying. 🙂

      • Antoine 4.3.2

        > NZ Power was a good policy proposal to control power prices without sinking the required capital for re-nationalisation. I’m actually a bit surprised they dropped the policy.

        Because they knew it was a bad policy

        • …what a useless reply lol.

          How was it bad? It was an eminently sensible way to achieve the aim of keeping power prices reasonable. Single payer schemes work in controlling costs of necessary goods- we’ve established that in the health sector, I don’t see why you’d expect the electricity sector to be any different.

          Granted, the problem isn’t as urgent as it was, but I don’t actually see anything in the new policy that is aimed at controlling price inflation for electricity, which we will need to do if we plan to get to carbon zero in the future.

      • Antoine 4.3.3

        Matthew, you said “I dont think competition has provided anything meaningful to the electricity market”. It has delivered largely sensible investment and operation in the generation sector, as is its primary purpose, and should continue.

        A.

        • So you think it makes sense to run the generators privately?

          Interesting. I don’t see any particular incentive to do that, but I actually wouldn’t object to it so long as we nationalised the retailers and the lines. Competition among retailers doesn’t really seem to add any value to the customer at all, and having a single buyer would be an excellent way to keep prices under control.

          As for the lines companies, co-ordinating them is absolutely necessary. If they’ll co-operate with sensible policies that allow that co-ordination under private ownership, they can stay private. If they don’t, we should buy them out.

  5. Ovid 5

    Sounds a bit like the UK’s Winter fuel allowance which is paid to the elderly. Like that system, it sounds like the subsidy will apply just in the winter months. It’s easier to pay the power bill in January that the one for June.

  6. Cinny 6

    This will help so many people, and the long term benefits will flow through to the health sector. Thank you Greens, once again you’ve looked at the bigger picture 😀

    • timeforacupoftea 6.1

      Except down South here where our oldies have been locking themselves in one room of there house and wearing a coat during the day to keep warm in winter.
      But now there bill will be cheaper in winter months and with the discounted electricity bill they will be able to light there open fires in the lounge and bedroom at night and remove there coat. Most costs from there hot water system followed by there very expensive heat pumps.
      Kia coal is still the cheapest source for heating by far.
      Unfortunately they were hoaxed by the idea of free insulation and heat pump subsidy
      the removal of there coal ranges and multi burrners which heated there water on rubbish and coal with new electric ranges and heat pumps.
      You kind of turn off your heat pump when you get the shock of your new heat pump heating system comes in at $800 for the month.
      The system is a mess.
      Do you know that in Central Otago and South Otago where our power is made right on our door step cost for a YEAR of electricity and heating are the same as TWO months in Minnesota. Minnesota has – zero C for three months of the year often minus 20 degree C and sometimes minus 40C

      • garibaldi 6.1.1

        I can’t stand it anymore. Once maybe, but 6 times !!! Please learn the difference between their and there.

      • Cinny 6.1.2

        Do you know that in Central Otago and South Otago where our power is made right on our door step cost for a YEAR of electricity and heating are the same as TWO months in Minnesota. Minnesota has – zero C for three months of the year often minus 20 degree C and sometimes minus 40C

        DANG!!! That’s outrageous.

      • weka 6.1.3

        Yep. And the coal ranges got sent to Auckland because for a while there was a trend for that style of kitchen design. I assume they get scrapped when the design fashion changes

      • RedLogix 6.1.4

        The entire building/energy/heating system in NZ is and always was totally fucked. Given a clean sheet of paper a small group of talented engineers and building designers could easily design a single, coherent system of totally renewable generation, storage, transmission and distribution to ensure EVERY person in this country lived in complete, healthy comfort all year around for free.

        • Antoine 6.1.4.1

          You had me until the ‘for free’ bit… How about ‘for expensive’?

          • RedLogix 6.1.4.1.1

            It’s a thought experiment I agree, but in principle I think it is possible to design a total system (that includes efficient building design) which generated far more benefits to society than costs.

            In Russia for example, all city apartments are heated with waste heat from the city power plants, all winter. at no cost to the occupiers. While not directly comparable to the NZ scenario, it’s a simple example of energy being treated as a public good.

  7. Skeptic 7

    Doesn’t really address the underlying problem – lack of co-ordination and national planning. When Lockjaw Smith decided to scrap NZED any semblance of future proofing went out the window. The Greens subsidy is bandaid stuff – I thought they had a comprehensive alternative energy plan for renewable energy? If they do – the first thing they’ve got to do is re-nationalise the electricity supply side into a single entity – it’s a strategic national asset for Christs sake. What other country is dumb enough to sell it’s strategic assets overseas? Maybe after the Government has taken control again, some real planning can get done – leaving it to profit driven private enterprise is worse than a joke – it’s a disaster.

    • RedLogix 7.1

      Thanks for expressing what I was struggling to say. While the underlying motivation and intent of this policy is true to the Green ethos … the implementation just feels so vanilla, so middle of the road. A capitulation to business as usual.

    • weka 7.2

      “If they do – the first thing they’ve got to do is re-nationalise the electricity supply side into a single entity – it’s a strategic national asset for Christs sake.”

      Sure, but to do that they’d need to be a majority govt.

      Have a look at their overall policy, it’s better when read in context.

      • Skeptic 7.2.1

        Yep and after they’ve nationalised the assets we – the taxpayer and our ancestors bought built and paid for – they can entrench the legislation so no future fucker can ever stuff it up again.

    • Lulu 7.3

      NZED and re-nationalise? Maybe. The game changer in the Green’s policy is the twin planks of 100% renewable generation and the thermal generation plan. The rest, as discussed elsewhere, is interesting but flawed in some way albeit minor. If you follow the sector you will know that many people say 100% renewable can’t be achieved. The Greens stand out from every other party by calling for 100% renewable. All those industry commentators say you have to have thermal for back up when the hydro is dry.
      The Greens stand on their own and have made themselves unpopular with the sector by calling for a thermal ban.
      These two may not seem bold but they are. They are also true to the Green ethos in respect to addressing climate change. Respect.

  8. Karen 8

    The full policy is worth a read for a more comprehensive look at the thinking behind the proposals:

    https://www.greens.org.nz/sites/default/files/policy-pdfs/Empowering%20New%20Zealand%20-%20paper.pdf

    Subsidising winter bills for poor households makes a lot of sense economically as well as being humane with fewer people getting sick because they are unable to heat their homes.

    • Gosman 8.1

      Aren’t you just subsidizing consumption? Isn’t a better way to encourage conservation? I would think that if they wanted to promote energy conservation they should boost welfare to the poorest during the winter months and let the people themselves decide if they spend this on power or on other things.

      • McFlock 8.1.1

        No, the problem is that the price spikes lead to conservation below healthy levels, or unexpected bills that get people into financial strife.

        This is obviously an experience deficit that you have, but when people are actually poor, they lower spending not just on things that are nice to have, but things that are essential: good food, good accommodation, and of course heating.

        So conservation isn’t the problem. Even income isn’t really the problem: it’s the fact that winter spikes create a sudden and difficult-to-calculate dent in your wallet, so you either over-compensate and get pneumonia, or end up with a budget shortage. I suppose you could make everyone wait a week for appointments and reimbursement from stalag-luft WINZ, but ideally you’d just pay the power company directly so the actual negative impact on the person is minimal.

      • Ad 8.1.2

        The lack of clarity about the future role of EECA is pretty odd.
        It is supposed to the primary agency for driving energy efficiency in all matters.

      • Antoine 8.1.3

        > Aren’t you just subsidizing consumption?

        Nope. That would be the case if they were reducing the per-unit charge.

        A.

  9. Gosman 9

    Why did they ditch their single buyer model they proposed with Labour?

  10. Ad 10

    I can see they are trying to give as much actual benefit to real people as possible, without wasting their first term political capital on buying back shares of listed energy companies. That would be an international-scale shit fight a new government would not need.

    What I do struggle with is the instruments of the policy.

    How will this subsidy be distributed?
    – Via MSD?
    – Via Electricity Commission?
    – Via the energy retailers themselves?
    – Via DHB’s?
    – Via IRD?
    Just needs a little fleshing out on the how.

    How will the 100% renewable generation policy be executed?
    – Via legislation?
    – Via regulation?
    – Via Electricity Commission?
    What’s the least forceful means – and hence least politically costly means – of achieving the result?

    Also I don’t understand the rationale for “encouraging” the merger of lines companies. Just to give a local example, Vector is owned by the AECT. This AECT shareholding will be returned to the Auckland Council in a few decades. The income stream is massive, and currently distributed to beneficiary citizens in a welcome annual cheque.

    Merging Vector with another lines company could dilute that AECT shareholding below 50% – and the citizenry then lose any chance of regaining public control without spending dumploads of ratepayer cash.

    Losing that public control would mean losing the ability to fund a whole bunch of Auckland’s needed infrastructure.

    The scenario would be replicated in those remaining publicly-owned lines companies such as those in Dunedin and Christchurch. Seems counterproductive to public ownership.

    • McFlock 10.1

      I agree with the vector thing in general, but different lines companies are just a redundancy, by and large, and in private ownership they’re a drain.

      • Ad 10.1.1

        Those that remain in public ownership should be encouraged to remain so.

        You may recall the kind of scrutiny that Dunedin Council’s Aurora got from their Council and the Otago Daily Times over their very poor asset management and safety profile.

        Public ownership should be encouraged for its democratic accountability.
        It’s not everything, but it’s a start if the pressure is sustained.

        That same pressure is pretty much impossible to regain once public ownership is lost.

        • McFlock 10.1.1.1

          Yeah – the lack of maintenance by aurora vs tranzrail in the late 1990s is good comparison. Private ownership strips profits at expense of infrastructure then sells up, public ownership strips profit to buy stadium then fires people. But at least the latter came out in the wash, and shit got replaced.

          • Ad 10.1.1.1.1

            Kiwirail are on taxpayer life support and will be for the foreseeable future.

            People need electricity a whole bunch more than they need bulk freight rail.

            I think this amalgamation policy is an unnecessary red herring.

            • McFlock 10.1.1.1.1.1

              The only reason you think of it as bulk freight rail and nothing else is because it got stuffed in the 1990s.

              But in general I quite like the green power policy, especially the low-income winter power offset.

              • Ad

                Kiwirail is bulk freight.

                That’s most of our export agri economy.

                • McFlock

                  Is. Present tense. as in “is almost exclusively freight”, or “is a small fraction of the track length it used to be”, or “is barely connecting the main centres any more”.

                  We do have some nice walking and biking trails where rail lines used to be thirty years ago, though.

  11. timeforacupoftea 11

    Imagine if the Greens said to labour, hey we give absolute support in everything else to the next election if you take on our main election winner that LABOUR and GREEN parties re-nationalise the electricity supply side into a single entity again.
    Other wise join us in opposition cause we are so used to being in opposition it won’t worry us Green Party Politicians one JOT !!!
    Anyway us Green members do get far more things passed in opposition than what you Labour Party ever get.

    I WOULD VOTE FOR YOU GREENS ON THIS ONE A LONE.

    • Ad 11.1

      How much more in taxes would you be prepared to pay for the govt to do that? 3% more? 5% more? 7% more? And your relatives?

      • timeforacupoftea 11.1.1

        20% more tax once your income rose above $100,000 per annum
        Those politicians could easily cough up that amount without noticing any difference
        to their wage package.
        ( haaaaaaa I hope spellcheck got the (their) right snigger to garibaldi 6.1.1, I used to get growled at by my lecture at Uni doing my degree but like Key said often IN THE END know one cares these days.

        • Ad 11.1.1.1

          Awesome. No one in NZ ever affords a mortgage again. Top work.

          Everyone wants to go to heaven, but you don’t meet too many who want to die first.

          • McFlock 11.1.1.1.1

            How does a tax increase on the top <10% mean nobody ever affords a mortgage again?

            Or do less than ten percent of taxpayers afford a mortgage right now?

        • Richard Christie 11.1.1.2

          Key said often IN THE END know one cares these days.

          Key, as well as you, is wrong about that.

          Also, your enthusiasm for the Greens aside, I doubt that many of them share your enthusiasm for burning coal.

  12. Grafton Gully 12

    Where are the protections for prepayment meter consumers ?

    https://www.ncbi.nlm.nih.gov/pubmed/23793123

  13. saveNZ 13

    I’d like to see real regulation of those ‘daily charges’ which seem to be spiralling out of control!

    You can pay $75 per month and not even draw any power.

    Also more on power connections which is a rout. Basically any body that trys to put on power may be hit by a ‘transformer’ charge of $8000, you are then forced to pay it up front, while Vector takes months to actually do the 2 hour job, even though you pay for the transformer you then do not own it.

    Somehow the electricity in this country has become a system where you are forced to pay for the infrastructure of the power, (transformers, cables to your house, your meter box, connection to the meter box etc) , you have to pay to repair the infrastructure you paid for and then somehow you don’t actually ‘own’ the infrastructure you paid for and you have to pay daily charges on it, whether you draw any power or not.

    Basically get off the Grid completely is the best way to help people rid themselves of power bills!

    • Gristle 13.1

      This electricity infrastructure is required to be available anytime of the day or night to satisfy people’s requirements. That is why there is daily charge independent of how much energy is carried: transferring all onto the kWhrs charge would see unit increase. Running a network or a hydro generating station is largely a fixed cost exercise. The rort is that it is billed as a variable cost model.

  14. mosa 14

    Kiwis have long been victims of the electricity providers who play god with this essential service and rort the consumer on a regular basis.

    I think the Green policy has merit and the winter warm up package will be welcomed by those struggling to pay for one of life’s necessities.

    The renewable energy policy is bold but attainable but will have to wait for a future progressive government with the courage to implement it.

  15. timeforacupoftea 15

    Global warming is coming, we will all be saved.

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