Grey Power November 2018

NZ GREYPOWER MAGAZINE » NOVEMBER 2018 21
A powerful lesson
By Tom O’Connor
We have waited for more than 20
years for the promised savings
from the 1997 restructure of our
system of electricity generation and supply
to materialise.
They were never going to and we have
families who cannot afford to pay their
power bills, as well as buy groceries.
It should be no surprise to learn that
the International Energy Authority said
last year that household electricity prices
in New Zealand have grown faster than in
other countries, and that rises between
2009 and 2014 were “significant”.
It remains one of the more glaring examples
of the catastrophic failure of applying
the flawed principles of neoliberal
market forces to an essential commodity.
Electricity is no longer an optional extra
or modern convenience we can choose
to do without as it was in our grandparents’
time. It is as essential and the air we
breathe and the water we drink.
For a previous generation getting in
the firewood was a regular chore which
required hard work and skills with
axe and saw. Today many households
don’t even own an axe, let along anyone
with the ability to use one safely.
Many homes have become uninhabitable
without electricity.
Apart from no power for heating and
cooking, turning on a water tap requires
electricity to drive the pump, meaning
toilets and showers cannot be used.
In the push to clean up the air in winter,
particularly in towns and cities with a
serious smog problem, some local authorities
are encouraging, and in some cases
requiring, home owners to get rid of solid
fuel heaters and become totally reliant on
electricity.
We have built our entire society to be
solely dependent on electricity. Without
it our world would grind to a halt in a
few hours.
Communication systems and industries
would shut down and city roads
would be death traps. Turning off the
power today would be the equivalent
of and un-survivable heart attack for
the country.
Yet we allow obscene profits to be
made from it in the fatally flawed belief
that market forces will solve all problems.
They don’t. They simply create new ones.
These facts were well understood in
1997 when former National minister Max
Bradford deregulated the power market
against sound advice and the will of
the community. To the alarm and anger
of consumers, Bradford set about unraveling
the former system with almost
religious zeal.
Until that time, we had the Government
owning and operating generation
and high voltage power lines, with locally
elected power boards as retailers and
managers of low voltage supply lines.
There were no market forces or competition
between power boards. There was
no need for them but the old system was
thrown out, baby, bath water and all.
These were replaced by a bizarre multi
headed, money making monster consisting
of generation companies, about 30
lines companies and numerous retailers
all taking profits from consumers with
little regulation and co consumer control.
Those who sought to generate their
own electricity with solar panels and other
technology have been discouraged by
prices and scaremongering.
In a strange contradiction one of the
world’s most toxic industries, aluminium
smelting, was encouraged to establish
in New Zealand with very low electricity
prices and a $30 million bribe to remain
when market forces put the industry
under threat.
The smelter was opened in 1971 following
the construction of the Manapouri
Power Station by the Government
to supply it with electricity. It now uses a
massive 13 percent of New Zealand’s total
electricity production.
Reacting to a 50 percent increase in
power prices in the past 17 years Energy
Minister Megan Woods launched a major
review of the electricity market, from generation
to retail and distribution.
That review is long overdue but it remains
to be seen if it will deal with the underlying
problem of inappropriate market
forces applied to an essential commodity
regardless of how it is generated.
There is no possibility of returning to
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locally elected power boards as the Government
also wants all electricity generation
to be from renewable sources
by 2035.
That is a commendable, if idealistic,
goal but much more acceptable than the
enforced deregulation of the system 20
years ago which helped create many of
the problems the new Government must
deal with.
The predictable lesson from all of this
is that there are some services and commodities,
on which our lives depend,
which must never be subjected to market
forces. Along with education, health services
and drinking water we must include
the supply of affordable electricity.
Tom O’Connor
Northland
Auckland
Bay of Plenty
Waikato
Taranaki
Hawkes Bay
Manawatu
Canterbury
Otago
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