John MacDonald: RMA changes only part of the solution to our power puzzle

If you’ve heard all the talk over the past 24 hours about the Government making more changes to the Resource Management Act and you’ve thought ‘oh boring, nothing to do with me’, think again.

Because there’s one aspect that has potential to make a difference for anyone and everyone in the country. Which includes you.

I don’t think it’s going to be enough on its own. Because, if you don’t need cheaper power bills, then you’re shouting drinks tonight.

So I think a lot more than what the Government is proposing to do with the Resource Management Act is needed. But I’ll get to that.

What happened yesterday, is the Government announced more changes it wants to make to the RMA - the Resource Management Act - which is the legislation that sets out all the rules and requirements in place to protect the natural environment.

To make sure we don’t go all “get stuff done” and “you can’t stop progress” on it, and then look up and realise that we’ve stuffed the environment while we’re doing it. I know some people will argue that we’ve still managed to stuff the environment. But that’s what the RMA is all about.

In essence, it lays out all the hoops people and organisations and companies have to jump through before they can do things like set-up a new power station.

And this is the aspect of the changes announced yesterday that is most relevant to the here-and-now.

The here-and-now where wholesale electricity prices in New Zealand are seven-times higher than what they were three years ago.

Which is why we’ve seen some big manufacturing plants either closing down completely or putting things on hold for a bit until the power prices start to come down a bit. And the Government’s talking about interim fixes, such as importing more liquefied natural gas.

They’ll do that. And they’ll keep putting the heat on the four big electricity generation companies. Which not only generate the power, they also sell it to us. So this is Meridian, Contact, Genesis and Mercury.

But the more power there is, the lower their profits. Simple as that. Which is why I think the Government’s plan only goes part of the way towards giving a more sustainable electricity system and market.

What I think needs to happen, is the control these four big companies have over things needs to change.

And the most straightforward way of doing that, is changing the way things are structured - and separating power generation from power retailing. That’s why people refer to these companies as GenTailers - they make the electricity and they sell it.

I don’t see things changing all that much until we rip-up the current structure and tell Meridian, Contact, Genesis and Mercury that they’ll make the power, and other companies will sell it to us.

That way, they could only charge what the market is willing to pay. Instead of the other way ‘round, as it is now.

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Morning's Podcast with John McDonald
from News Talk ZB.

Speaker 2 (00:13):
If you've heard all the talk over the past twenty
four hours about the Government making more changes to the
Resource Management Act and you've thought, oh, boring, yawn, nothing
to do with me. If you thought that, you need
to think again, because there's one aspect of what was
announced yesterday that has potential to make a difference for

(00:36):
anyone and everyone in the country. Anyone and everyone so
that includes you, doesn't it now. I don't think it's
going to be enough on its own to make the
significant difference that you want. In fact, not just want
to make the significant difference that you need, because if

(00:58):
you don't need cheaper power bills, I'll tell you what
you are shouting the drinks tonight for all of us,
you know, in the time and place we'll all be there.
So I think a lot more than what the Government
is proposing to do with the Resource Management Act is
needed if we're going to get cheaper power prices. But
I'll get to that in a second. A little bit
of background. What happened yesterday is the government announced that

(01:21):
it wants to make some further changes that it has
already announced to the Resource Management Act, which is the
legislation of course, which sets out all the rules and
requirements in place. It sets them to protect the natural environment,
to make sure we don't go all you get stuff
done on it, or all you can't stop progress on it,

(01:43):
and then look up and realize down the track that
we'll stuffed up the environment while we're doing it. I
know some people will argue that we've still managed to
stuff the environment, but that's what the RMA is all about.
In essence, it lays out all the hoops people and
organizations and companies have to jump through before they can
do things such as set up a new power station.

(02:05):
And this is the aspect of the chain announced yesterday
that it want to focus on this morning, because it's
the bit that is most relevant to the here and now.
The here and now where wholesale electricity prices in New
Zealand are seven times higher than what they were three
years ago. So yeah, you're not imagining it. Power prices

(02:26):
have gone through the roof. In fact, you'll remember Energy
Minister Siman Brown wasn't that long ago. A couple of
weeks ago, he was saying that our power prices are
the highest in the western world, and since then we've
seen some big manufacturing plants either either closing down completely
or putting things on hold for a bit until hopefully
the power prices start to come down a bit. And

(02:47):
the government's talking about interim fixes such as importing more
liquefied natural gas because we're short on the gas to
make the power, and we're short on the water too,
because the hydro lacks are running low because there hasn't
been enough rain. So a lot of becauses there. And
I saw on the news the other night that they
were saying the government's due to make an energy announcement
very soon, which I'm packing. I'm packing. That'll be confirmation

(03:08):
that they're going to start importing the gas. I'll do that,
and they'll keep putting the heat on the four big
electricity generation companies which not only generate the power, that
only make not only make the power, they also sell
it to us. So this is Meridian Contact, Genesis, and
Mercury Contact is our outfit, the crowd we use to

(03:28):
get our power with at home or from at home.
And you know what, none of these big four companies
are going to be in the least bit interested in
what the government wants to do with the Resource Management
Act to make it easier for new energy projects to
get consent. Why is that because they are not in
the least bit interested in reducing their profits. The more

(03:51):
power there is, the lower their profits. Simple as that.
So that's why I think the government's plan with the
RIMA and to make it easier to get new energy
projects up and running, That's why I think it only
goes part of the way towards getting us a more
sustainable electricity system and market. And what I think needs

(04:13):
to happen is the control that these four big companies
have over things that needs to change, and the most
straightforward way of doing that is changing the way things
are structured and separating power generation from power retailing. That's
why people refer to these companies as gen tailors. They
generate the electricity, they make it, then they sell it

(04:34):
to people like you and me, and they sell it
to people running businesses, some of whom are pulling the
plug because these gen tailors are charging so much for
their power. And I don't see things changing all that
much until we rip up the current structure and tell
Meridian contact Genesis and Mercury that they're going to make
the power, but other companies are going to sell it

(04:59):
that way. They could only charge what the market is
willing to pay, instead of the other way as it
is now.

Speaker 1 (05:09):
For more from Category Mornings with John McDonald, listen live
to news talks at be Christchurch from nine am weekdays,
or follow the podcast on iHeartRadio.