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Time to wake up to the Electricity Authority

Written By: - Date published: 8:30 am, May 29th, 2016 - 46 comments
Categories: capitalism, class war, discrimination, Economy, energy - Tags:

Electricity Authority website

In June there are workshops being held about the Electricity Authority’s transmission pricing proposal. Yawn, perhaps, until you get the power bill.

Check the relevant dates in the link, and show you can attend by confirming to this email address.

They will of course be expecting just the Usual Suspects to turn up like the Major Electricity Users Association, the key investors in electricity generation, and of course staff of the generators themselves.

The Authority has been quite smart by publicising their forecasts that some regions will do great with charging decreases, but Auckland gets it in the neck. They don’t tell you whether a single consumer will notice any difference in their power bills, once the local utilities and lines companies fiddle with their billing. They don’t tell you if they have a functioning mechanism for holding the billing of lines companies to account. They should.

The Electricity Authority claims in their forecasts that Invercargill’s charges will go down $64, but Ashburton’s will go up between $102 and $117, for example. The Chief Executive of the Electricity Authority, Carl Hansen, said the regions seeing an increase were those that had benefited from substantial recent grid upgrades, or where transmission prices had been lower than average.

He forgot to tell you how much lee-way the big users are going to get, with great sweetener deals for businesses like Rio Tinto Aluminium in Bluff. They can apply for more “relief” on top of the $21 million of grid costs they are already ducking. Prior to listing on the stock exchange, Meridian just sucked that up.

In the south of Auckland, New Zealand Steel faces a 263% increase in its grid charges. Guaranteed they will also get “relief”. If you’ve ever been there, it’s a small town. Also Oji Fibre Solutions (formerly Carter Holt Harvey). Also Whangarei’s New Zealand Refining.

And wait there’s more.

The Authority is also proposing to remove all special pricing arrangements for small solar and wind generators who link to a local lines network, rather than the national lines network. That will become a significant disincentive for small-scale sustainable generators. Meaning, the big corporate generators capture more of the market and the smaller ones get less of a chance. Community-initiated generation proposals like Dunedin’s Blueskin Bay get that much harder.

I’m not for a moment saying that the Authority is biased against citizens or communities. I’m definitely not saying that by publishing forecast savings by region they are playing a nasty divide-and rule game. I am saying that the Electricity Authority should be able to easily demonstrate to citizens their legislated task to run and price a national grid within national interest tests.

But perhaps it is time for citizens to turn up to these Electricity Authority briefings and not leave this stuff to the usual black suits, specialist consultants, asset management planners, and the like.

This review started nine years ago. For my ten cents, the Electricity Authority doesn’t demonstrate to citizens that it has value being placed outside of Ministerial Authority. It takes too long, worships fat corporations, doesn’t listen to citizens, and hasn’t made a peep about changing our generator mix away from coal and moving to 100% sustainable generation. Time to run the grid from a person who faces consumer pressure every day, amplified through the media: a Minister.

Maybe the Salvation Army would like to turn up to these briefings, or some of the unions, or some NGOs who stick up for the poor and homeless and cold.

Read up from their site, turn up, and let the Electricity Authority hear from citizens.

46 comments on “Time to wake up to the Electricity Authority ”

  1. save nz 1

    Great post! Of course the poor and middle NZ should pay more for electricity, while corporations which are increasingly based owned offshore should get tax relief – that’s National policy! sarc.

    As for solar, it is all about keeping the old polluting systems going, and just fudging our climate change and environmental targets…. more National policy.

    • Richard Christie 1.1

      +100%

    • Chooky 1.2

      +100 Good Post !…the Left Opposition coalition should be hammering this!

    • Richard@Down South 1.3

      I think power is too expensive atm… but then, we in Invercargill pay more than those in the North Island when more power is generated closer to us and sent north…

      Rio Tinto shouldnt get a subsidy….

  2. ianmac 2

    “…but Ashburton’s will go up between $102 and $117,”
    There are some regions where the electricity charges are remarkably low. Maybe Ashburton is one of those and would be playing catchup with their neighbours.
    It is unique among New Zealand electricity distribution companies in that it is the only company that is a cooperative…”
    Cannot find out what Ashburton’s charges are though.

    • Gristle 2.1

      Electricity Asburton is run by a community owned Trust. So is its neighbour Alpine Network and Network Waitaki, and so is Unison and …… There is a really long list of “co-ops.” These are all rejections of the reforms that Max Bradford foisted on NZ. Some communities gave the fingers to Max and the Enron boys and would not sell networks to corporate interests.

      The EAs approach to grid charges has been to try and put cost of the grid to the consumers who use it. Tiwai Point doesn’t use much grid so it’s charges go down. Just like North Otago. All those big hydro stations just a stones throw away would see North Otago prices go down. (I am not kidding about the stone throw. Two of the three GXPs could be covered by a good underarm from one of the Chappel brothers.) But unfortunately the charges don’t go down they go up. Transpower charges to North Otago go up.

      So two years ago the North Otago Transpower charges went up by $700,000 to account for grid development to support Auckland. Now they are going up by another $300,000 per annum because North Otago doesn’t have to support Auckland.

      • Ad 2.1.1

        Seems incredible that the Authority can’t balance this out better. Prior to Bradford there were supposed to be massive local benefits to consumers. Great to be reminded of the remaining local trusts.

      • Draco T Bastard 2.1.2

        So two years ago the North Otago Transpower charges went up by $700,000 to account for grid development to support Auckland.

        [citation needed]

        • Gristle 2.1.2.1

          Sorry cannot find a news report to back this up. The information came from discussion the Graham Clark the CEO of Network Waitaki Limited which occurred in 2014.

          • Draco T Bastard 2.1.2.1.1

            See, time and time again we get people from outside of Auckland blaming Auckland for the high prices and that they’re paying for Auckland in some way. But when the numbers are actually looked at it turns out that Auckland is actually subsiding them.

            It seems like a common fallacy and this just sounds like another instance of it.

            • Poission 2.1.2.1.1.1

              how many power stations in auckland or northland? its an obvious problem.

            • Gristle 2.1.2.1.1.2

              See, time and and time again we get people from inside of Auckland denying that at times they get carried by the rest of NZ.

              DTB, a conversation can be cited as evidence, and if you choose not to believe me when I provide a real persons name who is the head of the company then I take from that you have a very low level of trust.

              If you look at http://www.networkwaitaki.co.nz/Schedule_of_Charge_to_apply_from_01-04-16.pdf

              And in the previous year you will see consistent high increases by Transpower for grid charges that exceed the rate of increase for NWL’s own network. The work that Transpower has been doing over the last 5 years has been focussed on:
              1. Beefing up from the Waikato to Auckland
              2. Putting Pole 2 in for the DC link from Benmore to Wellington

              And all the other Networks/consumers have had to pay for it.

              Networks like Top Energy and Tasman Networks have been buying sections of the Transpower grid to get out of Transpower using those assets to lever yet further money from the more remote lines companies.

              One can understand why there is a section of South Islanders keen to become a state of Austrailia. I believe that Tasmania is fully supportive of this as it will promote them from being the butt of intra-Australian jokes,

              • Draco T Bastard

                and if you choose not to believe me when I provide a real persons name who is the head of the company then I take from that you have a very low level of trust.

                And why would I trust someone who’s position is there to justify price increases? Especially after we get shit like this?

                Telecom’s public image may take another hit as an audio clip of Theresa Gattung circulating on the internet has the chief executive admitting to the company “not being straight up” with customers.

                “Think about pricing. What has every telco in the world done in the past? It’s used confusion as its chief marketing tool. And that’s fine,” said Gattung in a speech recorded on March 20.

                Businesses do have a tendency to lie to us.

                Transpower has been doing over the last 5 years has been focussed on:

                And where were they working before that? And where are they going to be working next?

                It’s the nature of physical networks and labour availability. The network crosses the entirety on the country but they don’t work on the whole thing the entire time. They work on sections of it moving their workers around as needed.

                And as I said up thread. We get people from outside of Auckland complaining about how they’re subsidising Auckland but when we follow the money it turns out that it’s Auckland subsidising them. That figure is $1 billion per year going from Auckland to the rest of the country and that’s just in taxes.

                I have no problems with that happening. In a society there’s going to be cross subsidies happening all the time that simply can’t be helped.

                No, what pisses me off is people outside of Auckland complaining that they’re subsidising Auckland when it simply isn’t true. So, yeah, I’m doubtful about this one being true.

                • Poission

                  Think about pricing. What has every telco in the world done in the past? It’s used confusion as its chief marketing tool. And that’s fine,” said Gattung in a speech recorded on March 20.

                  Prediction 42 (The Dilbert future) 1998

                  In the future,all barriers to entry will go way and companies will be forced to form confusopolies

                  definition – A group of companies with similar products who intentionally confuse customers instead of competing on price.

                  eg Insurance,mortgage loans,banking, telco ,financial services

      • millsy 2.1.3

        Actually the trusts were created before the Bradford reforms, which by the way, stopped them from expanding (a move repealed by Labour V).

        Labour IV and National IV wanted to sell the power boards but they realised that they didnt actually own them (they owned themselves), so the consumer trusts were created on the assuptions that they would sell the lines companies. Most, didnt.

      • Corokia 2.1.4

        I heard on RNZ when this was 1st reported that the increase in Ashburton was due to the power and infrastructure needed to run the irrigation schemes there. I expect the same would apply to North Otago.
        It would be grossly unfair if residents in towns in intensive dairying areas are made to pay more because local farmers have big irrigation schemes, but I guess that’s what you get with National’s love affair with dairy.

        • Gristle 2.1.4.1

          The point is you need Transpower’s grid to transport from the dams to the local network. The dams on the Waitaki River are in the Network Waitaki area. Transpower’s grid in two cases is about 75 metres (not kilometres) long.

          There is more than enough generating capacity available in our backyard so it is sent north and across into the North Island.

          The amount of new load brought on in the North Otago area has been about 10MWatts of peak load over the last five years. Most of this has come from irrigation systems or dairy sheds. This is load is next to nothing given the amount of electricity sent out of Otago to the north.

          I don’t know about Ashburton. But saying that price increases are due to irrigation seems simplistic. Most lines companies have a large component of variable income, and so they tend to make out like bandits when a lot of energy is transported. My thought would be that for lines companies there would be an opportunity to average down prices as largely under-utilised assets carry more load.

        • Gristle 2.1.4.2

          The point is you need Transpower’s grid to transport from the dams to the local network. The dams on the Waitaki River are in the Network Waitaki area. Transpower’s grid in two cases is about 75 metres (not kilometres) long.

          There is more than enough generating capacity available in our backyard so it is sent north and across into the North Island.

          The amount of new load brought on in the North Otago area has been about 10MWatts of peak load over the last five years. Most of this has come from irrigation systems or dairy sheds. This is load is next to nothing given the amount of electricity sent out of Otago to the north.

          I don’t know about Ashburton. But saying that price increases are due to irrigation seems simplistic. Most lines companies have a large component of variable income, and so they tend to make out like bandits when a lot of energy is transported. My thought would be that for lines companies there would be an opportunity to average down prices as largely under-utilised assets carry more load.

  3. Alfie 3

    The EA workshops are being held in Akl, Wgtn, ChCh and Invercargill. Are they deliberately avoiding Dunedin? I’ll bet there would be quite a few people from the Blueskin Bay area who’d be keen to voice their opinions on the Authority’s lack of support for renewable energy.

    But then who needs democracy? It’s such an overrated system which only gets in the way of unfettered corporate profits.

  4. red-blooded 4

    “Community-initiated generation proposals like Dunedin’s Blueskin Bay get that much harder.”

    Not a great example. This proposal would see wind turbines attached to a small outcrop of unstable rock, with aquifers running through it that feed all the local water sources. It’s also right on the coastline, the habitat of numerous at-risk bird species like NZ falcons. The DOC report into wind generation recommends that any turbines should be at least 50 km from the coast. And as for being “community-initiated”? The council has already ruled that this is not the case; the proposal does not arise from a community group and it does not bring benefit to the local community. In fact, the community are very much opposed. Nimbyism, I hear you say? Perhaps, to some extent, but there’s also a lot of concern about environmental impact.

    Oh, and Blueskin Bay is where the proposers live, but it’s not where the proposed site is. A bit of nimbyism going on there, too, perhaps.

    (ps, I don’t live anywhere near this site, but I’ve heard the arguments from both sides and read a lot of the documentation, and the DOC report into wind farms. I’m not anti-wind generation, but I do think sites need to be carefully chosen and issues like bird strike are relevant.)

    • Ad 4.1

      I did not state that the community universally supported it. Obviously they don’t.

      If the Council decision goes against the initiative, I’d be happy to donate to an appeal.

      Electricity generation should not be the preserve of the corporatised few or the individual who seeks to withdraw entirely. That’s what the Authority should encourage: greater competition at all levels of generation.

    • ianmac 4.2

      Does it mean that if Blueskin went ahead, the consumers would have to pay a premium just to stay on the grid? The more you do for self-sufficiency the more that Transpower wants to charge.

    • Draco T Bastard 4.3

      and the DOC report into wind farms.

      This one? Where it says:

      The impacts of wind farms on New Zealand bird species and populations are unknown. This document reviews available literature on the impacts of onshore wind farms on birds, based on studies in other countries.

      The very first sentence tells us that they don’t know. The second that they’re basing their entire report on offshore studies. And what do those offshore studies find?

      In the end, using 58 mortality estimates that met their criteria, they came up with an estimate. According to the current literature somewhere between 140,000 and 328,000 birds die each year from collisions with wind turbines.

      Sounds like a lot but that’s across all of the US. To put that number into perspective:

      Besides habitat degradation and destruction, the top human-built environmental threat to our feathered friends are buildings. As many as 970 million birds crash into them annually, according to a June 2013 study in the Wilson Journal of Ornithology. Other studies, according to the U.S. Fish and Wildlife Service (FWS), estimate that every year as many as 175 million birds die by flying into power lines, which electrocute tens of thousands to hundreds of thousands more; 72 million are poisoned by misapplied pesticides; nearly 6.6 million perish by hitting communications towers; and as many as 1 million birds die in oil and gas industry fluid waste pits.

      Our houses are more of a threat.

      That said, I think that wind-farms need to be offshore. Not because of the danger to birds but because of the better wind. The fact that it’s also more environmentally friendly in many ways is a fortunate coincidence.

    • weka 4.4

      I have some concerns about how the project is being developped myself, whilst at the same time supporting small, community farms over thing big commerical projects for private companies.

      Did DOC comment on the Blueskin project itself?

      From my reading of the material available online, it’s pretty clear that this IS a community initiated project. Why do you think it’s not? I know that there is difference of opinion about the project in those coastal Otago communities, but that’s not the same as it not being a community based project.

      • Lulu 4.4.1

        It depends on your definition of community.
        I understand the scheme was conceived as a community scheme in the sense that the community around the wind turbines would own the plant, consume the output and, to the extent the output matched their consumption, they would offset purchasing generation from elsewhere through a retailer.
        I understand it has morphed into a scheme where an externally located generator with shareholders unconnected to this community would establish the generation plant. That party would generate and sell the output to whoever they can get a profit from including potential retail deals with residents of the Blueskin Bay community or thereabouts. The only financial benefits back to the community would be via profits if members of the community are shareholders of the scheme or through discounted retail prices back to the community but I don’t know whether that is proposed or not.
        None of these financial arrangements are relevant for the consenting process and the generator who I understand will be running the project and would trade the output is very quiet. To my knowledge the model of investment, ownership and beneficiaries (dividends or electricity tariffs) is not revealed to the public so it is not possible to conclude that this scheme is a community scheme in the original sense.
        I would love to know what the model is. For the moment the only community involvement I can see from outside is support for the consent and willingness to support the generator so the scheme goes ahead and its supporters can feel good about the environment.
        Very happy to be clarified or corrected.

        • weka 4.4.1.1

          hmm, I’m not sure about that.

          Here’s what I understand (from the project’s websites).

          1. The community came together to talk about the project.

          2. A trust was set up.

          3. The Trust is a registered charity.

          4. The trustees are all from the Blueskin Bay area.

          5. The Trust set up the Company, which is a social enterprise. At least two of the directors of that company live in the area, and the Company is based there. They also use volunteers from the community.

          6. The Company receives money from investors.

          7. The investment money is used to build the windfarm.

          8. The Company sells the electricity.

          9. The money from that comes back to the Company.

          10. The Company pay money to the investors and to the Trust.

          11. The Trust uses the money in the community.

          That all looks pretty straight forward and reasonable to me. It also means that there is a direct line of profit back to the community.

          I guess if I lived there I would want to know more detail eg how the profits are split between the community and the investors. Both the Trust and the Company have documents online that probably answer questions about how the details work (I don’t have time to read through them all). It might be easier to ask the people involved directly. I can’t see anything on the face of that makes me think they are doing something that’s not community based.

          The Charities register doesn’t appear to use permanent URLs, so here’s what I think is the founding document (PDF?). You can search the register for BLUESKIN RESILIENT COMMUNITIES TRUST to get all the documents.

          http://www.societies.govt.nz/pls/web/DBSIFRAME.I_Init?p_access_no=B98491B6C388C3F0E428FFD994B96C2F&p_receipt_number=11747364&p_sequence_number=1&p_reference_number=2178117&p_called_from=ALLTAB|doc1

          Blueskin Energy Ltd, including their constitution,

          https://www.business.govt.nz/companies/app/ui/pages/companies/4849319/directors

          • Lulu 4.4.1.1.1

            Thanks Weka,
            We are not necessarily at odds. If I start at your point 6 I see
            “The Company receives money from investors.”
            I get that. If I jump down to 9 the income from the sale of energy comes back to the Company. I get that.
            The bit I don’t understand is point 10
            “The Company pay money to the investors and to the Trust.”
            You have a question mark there too. You say
            “I guess if I lived there I would want to know more detail eg how the profits are split between the community and the investors.” I agree thus my post.
            I am also interested to know who is taking the risk of the sale price for the output being below the return the investors expect.
            I am not saying that it is dodgy. My point is that even if the community benefits as you suggest it is still not clear by how much and whether the community is carrying any of the risk.

            • weka 4.4.1.1.1.1

              From my limited understanding I would say not. Any financial and legal risk is held by the directors of the company, and perhaps the trustees of the trust that owns it. In that sense the community doesn’t ‘own’ the project but the structure looks normal to me. Both organisations docs are on line.

              I raised concerns in another thread about the fact that the project got so far down the track without having the site’s immediate neighbours on board, and what did that mean about community consultation, so I agree it’s not perfect. They also don’t have info online I would expect eg photos with the turbines overlaid that show visual impact, the measurements in a map etc. I find that pretty stunning tbh. But so much has been done by volunteers too and it’s probably none of my business. If I lived there I’d be asking questions but I also have a lot of respect for people in communities that make things happen and they look on the rightish track to me.

    • Kiwiri 4.5

      Does anyone know or can anyone point out to the information available – what specifically will the community benefits be and how will any benefits, particularly profits, be shared with the community?

  5. And then there is the landowners subsidising everyone’s power .. and putting up with all sorts of shit from the power companies
    http://kapitiindependentnews.net.nz/pylon-blasting-pollution/

    • ianmac 5.1

      They do the sandblasting because they can. Wonder what is used to recoat the pylons?

  6. ianmac 6

    Mike Williams has a second post up on Pundit in which he says that the Electricity industry should get alongside alternative sources like wind and solar rather than attack and penalise.
    (Someone named as Chris Morris seems very well informed on the negatives in the comments but his background is unknown.)
    http://www.pundit.co.nz/content/adapt-or-die-flicking-the-switch-on-solar#comment-43171

    • Kiwiri 6.1

      I know about Chris Morris who is an engineer and it could be him. Or it is that reporter in the South.

      • ianmac 6.1.1

        I wonder if he works in some sort of PR for the Electricity Industry. No matter. He certainly puts a different perspective on the alternative sources.

        • Alfie 6.1.1.1

          @ianmac: I wonder if he works in some sort of PR for the Electricity Industry.

          In his Pundit profile Chris Morris describes himself as a “power station engineer from Taupo”. While he may know a bit about the electricity business, he has been posting quite a lot of tosh when it comes to solar. See this earlier post and my responses, especially the last one.

          http://www.pundit.co.nz/content/solar-tax-makes-its-harder-to-be-green-for-now

          And by the way, I live in Blueskin Bay and I’m an enthusiastic supporter of the Trust. Their main focus is 100% community-based, providing insulation advice and generally warming up homes in this area. They’re good people.

          • Ad 6.1.1.1.1

            Great to hear from another enthusiastic supporter.
            It’s a vital initiative, and I really hope they succeed.

  7. reason 7

    The electricity authority was created by National who appointed it with right wing yes men………..

    They did their job for the nats by attacking Labours single purchaser policy to stop the new privatised power company s abusing and overcharging consumers…. They were reported in the media ( Dom post etc), as an Independent ‘Authority ‘ …….

    They backed National fully and involved themselves in a kind of ‘dirty politics, … Their right wing bias was undisclosed. The fearmongering and hyped up attack lines coming from Hansen, a former treasury and business round table flake, were New Zealand would suffer black-outs and ruination if Labour could curb or stop the taking of excessive profits and market exploitation that private power companies always want to engage in…..

    Basically They exist to protect their own highly paid jobs…. and the Profits of our little wannabe Enrons ….

    “California officials are seeking to recover some of the $30 billion Governor Gray Davis says Enron “extorted from the state.” https://www.wsws.org/en/articles/2002/05/enro-m10.html

    It’s also worth noting it was Enron and their right wing accounting tricks which lead to blackouts for California…….

    Geoff Bertram on single-buyer for electricity

    • Gavin 7.1

      I think you’re correct about Carl Hansen being fairly right-wing. Otherwise he’d be saying the sensible thing, which is why not roll everything back together as ECNZ and be done with it. We’re such a small country of consumers, why do we need so many energy providers? It’s costing these companies a lot of effort and time, costs to hold their customer bases, and we all end up paying for it sometime. Have any of them gone broke? It won’t get unwound, because they’ve all spent such a lot of money to split it up. But the old simpler system worked fine, and at least the one big outfit could make decisions which were geographically and economically the best for NZ.

      • Draco T Bastard 7.1.1

        +1

        • heather Tanguay 7.1.1.1

          The interesting thing about windmills and birds if, that very few birds I understand fly as high as the large turbines in New Zealand.
          Another myth ‘they frighten animals’, the sheep gather under them in the winter as it was warmer than out side the wind draft on the frost covered grass.
          As for solar, the Authority is not interested. The xtra charge people in the Wairarapa are having to pay is unfair. We sell for 8c a unit back to the power company the power we generate during the day and can not store over night, this is a miserable payment when you consider what people are charged per unit.
          When is this Authority meeting in Auckland or are our comments to be made by email?
          Of course this is a government appointed body looking after the interests of the power companies.

          • Ad 7.1.1.1.1

            As per the link in the post above, Auckland session is 14 June.

            The further link enables you to register to be there and have your say.

      • Robert Atack 7.1.2

        They won’t wind it back, most of the CEOs are on million dollar salaries
        http://www.stuff.co.nz/business/industries/10287778/Powercos-defend-bosses-wage-hikes
        snip
        Million-dollar plus salaries for the bosses of energy companies are on the rise as Kiwis feel the winter chill and associated soaring power bills.

        Figures obtained by the Sunday Star-Times reveal the chief executives of five of our biggest energy companies are on salaries topping the $1m mark; with Contact Energy’s Dennis Barnes the top earner, receiving a salary of $1.58m in the 2012-13 financial year.

        During a year in which power prices continued to rise and thousands of Kiwi families battled what Green Party MP Gareth Hughes described as “energy poverty”, Barnes received a $279,674 pay rise.

        end snip

  8. reason 8

    I checked back and it was Brent Layton doing the right wing dirty politics type smear for the nats …………

    …….”“Dr Layton’s extraordinary foray into political debate is nothing more than a National Party-appointed civil servant who has failed to do his job and is now trying to protect his patch.” – See more at: http://thedailyblog.co.nz/2013/06/11/sparks-fly-with-yet-more-shocking-right-wing-nuttery/#sthash.qddP6zpc.dpuf

  9. Tom 9

    Two cats one called Ally and one called Tom, beware fu8kers – BEWARE of dangerous CATS!

  10. AlpineNRG 10

    Awesome post! As one who follows the EA very closely I’m pleased to see this article. It hits the mark for sure. There is no doubt the EA could use some closer scrutiny. I know from personal experience that the EA has little regard for consumers or for its role as a regulator. They consistently side with industry to the detriment of the consumer, and do so in contravention or their own mandate and even the law. It’s heartening to know that people are starting to pay more attention to this pathological, de-regulatory institution.

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