Shane Jones: Regional Development and Associate Energy Minister says we need to split up the power of large gentailers to make energy prices competitive

Shane Jones says "structural change" to the energy sector is definitely on the agenda following the closure of two central North Island mills. 

Winstone Pulp has confirmed it’s closing its two mills near Ohakune, with 230 people set to lose their jobs. 

Jones says the Government can't control factors like global commodity prices, foreign exchange rates, and global shipping logistics. 

But the Regional Development and Associate Energy Minister told Mike Hosking the power of large "gentailers" needs to be broken up to make energy prices more competitive. 

He says the aluminium sector is looking towards importing, there's uncertainty for corn growers, and the country's biggest gas user Methanex has been facing issues. 

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Episode Transcript

Speaker 1 (00:00):
So outside the powerscrapt the mill closure massive blow of
course for regional New Zealand. You've got a couple of mills,
two hundred and thirty jobs. Just like that, You've got
the chateau problem ongoing. Fucker, Papa, that's a mess. So
the whole regions in real trouble. The Minister for Regional Development,
the Associate Energy Minister as well, Shanged Jones, as with
this morning to you, Kay, is this about power or
is it about pulp and logs?

Speaker 2 (00:21):
Ah, we can't control in New Zealand, Mike, the commodity prices.
We can't control foreign exchange. We can't control logistics at
the end of the Etoonomic railway line and will trade.
One thing we can control, though, is the structure and
the competitiveness of our power prices. And until such time
we start to look at options of breaking up the
power of each gent tailors who quite frankly have ruled

(00:43):
over various governments, intimidated them that your last speaker, I think,
if there's one thing I agree with her. Until we
boost competitiveness, you're going to see the aluminum sector telling
me they're going to start importing the corn growers are
doubtful whether they're going to grow because they kind of
they're worried about the cost of energy. And in course
we've got methodics briefing their start today about a substantial downgrade.

Speaker 1 (01:04):
Yeah, exactly. Is the EA of any use to anybody
whatsoever or not?

Speaker 2 (01:09):
Now, I've described the EA as a chocolate teapot, and
I stand by that because they've got all the powers
in the world. But I suspect that they've been intimidated
as well by the gent tailors. And look, it's up
to you and I as Kiwis and your listeners. Do
you want an economy where the price of power is
internationally competitive to keep businesses functioning? Or do you want

(01:30):
a disemvalue economy and turn it into an important model.
I don't want that, which is why Simeon Brown and
I are signing off the events signing off. Now the criteria,
and that criteria for the review of the power sector
will involve structural separation.

Speaker 1 (01:45):
Okay, so how are you going to do that and
what timeframe is that on? Because you're starting that, you
get it. The rubbers hit the road now, it's real,
So announcements don't cut it. When do you do something
about the EA. When do you separate the gent tailors over.

Speaker 2 (01:56):
What time In fairness to Simmy, he's already now that
he's looking for a number of new members for the EA.
I think the power is always been there. But look,
people have there had this nervousness, they've had this skitterishness.
Don't touch the power system. We trusted the power system
to deliver outcomes. They've boost international competitivists and national security.

(02:18):
They haven't. So we have to change it simple.

Speaker 1 (02:20):
And over what time frame? Though, because this is a
here and now problem.

Speaker 2 (02:24):
Yes, and I'm not walking away from that. And that's
a ghastly outcome for the people in all Harkuni in
that area. But the Power company solved the problem for
Reo Tinto. They had every opportunity and every incentive to
come up with a solution. For Winstone, they tried hard
and I find it's a very ghastly outcome. But obviously
the review has been signed off in short orders. The

(02:46):
work's already taking place with the Commerce Commission and the EA.
But hey mate, the reality is we're having a crack
at doing something remarkably different from the days of the
mid nineties and We've got to get to do it carefully.
So do we buger up the economy in the way
that Jasinda and Meghan Woods bug it up the guest

(03:06):
industry with the Juvenile announcement in twenty eighteen.

Speaker 1 (03:09):
Appreciate time, Shane Jones, Energy Minister, Regional Development Minister. For
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