Is Megan Woods setting herself up to be the next Minister to follow Clare Curran on to Labour’s back benches? No, that wouldn’t be right: Meka Whaitiri appears to be next in line there.
But Energy and Resources Minister Woods has hardly been an impressive performer, even though she’s on the government’s front bench. Remember her performance over the banning of any further offshore oil and gas exploration?
This week she tied herself in knots answering questions in Parliament on retail electricity prices.
She said the government was “proud” to have released the first phase of a review of the electricity market which identified there is a two-tier market developing, with 103,000 households defined as being in energy hardship.
“We do see that as a problem.”
National’s energy spokesman, Jonathan Young, asked her whether she would guarantee electricity prices would be lower in the next three years than they have been in the last three years. She replied:
“What I can guarantee that member is that this is a Government that is committed to seeing those 103,000 households who are in energy hardship offered some release. We will be looking for remedies”.
Young had another stab at getting an answer:
“Does she agree with the Electricity Price Review chair’s comments yesterday that the sharing of costs may need to be reallocated, and if so, how should they be reallocated?”
“ I again point the member to the fact that this is phase one of a two-part review. I absolutely agree with the chair of the Electricity Price Review, Miriam Dean, who has done a wonderful job and produced a very accessible document, that these are questions that we need to think about. What we have seen since the 1990s is a 79% increase in electricity prices for households. That has not been matched by business or industry, and that is a conversation that we need to have from here”.
This would give Yes Minister’s Jim Hacker a run for his money.
So those 103,000 households suffering energy hardship may have a long wait for a remedy from our Energy and Resources Minister.
Unless, of course, they shop around and find a retailer which will offer them a better deal.
The second phase of the report won’t be completed until some time next year.
Woods keeps harping on about a 79% increase in electricity prices for households since 1990, but in fact the retail market has been very competitive in the last four or five years. It is in the monopoly part of the sector, with the lines companies, that charges have been rising.
The real conundrum is to position the distribution sector for new technologies, particularly if the switch by households to solar energy and of transport to EVs, gathers momentum. The lines companies will still be needed as backup, but who will pay their future costs?
Most of the big power companies argue the electricity market is largely delivering fair, efficient, reliable, and sustainable outcomes for consumers. Meridian Energy, for example, contends the government needs to take a considered approach when attempting to fix wider social and affordability issues to ensure it doesn’t negatively impact on competition, or the investment needed to maintain security of supply and thereby delay transition to a low-emissions economy.
The Productivity Commission – in its recent report – warned of the need to be wary of changes in the electricity sector that have the unintended impact of driving price increases which slow down the electrification of transport and the transformation of the thermal-powered industrial plant in NZ.
Other authorities point out that NZ has plenty of natural gas and will need to use it to keep its transition to a lower-carbon economy affordable for homes and industry.
Pity about that ban on oil and gas exploration.