Simeon Brown: Pressure for govt to solve energy shortage

The Electricity Authority and Commerce Commission have both been asked to investigate whether power companies are price gouging.

Officials are also looking to import more liquefied natural gas to address the situation. 

Energy minister Simeon Brown joins Mike Hosking to discuss. 

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Episode Transcript

Speaker 1 (00:00):
Good morning.

Speaker 2 (00:00):
Your sense of price gouging real or not?

Speaker 1 (00:04):
Well, it's something that we need to have the EA,
which is the ultrist authority, look into. No one accepts these
high prices. We need to have confidence that price gouging
is not happening. But we also need the ultrist authority
in ComCom to do their job and publicly report that
so the New Zealanders can have the confidence that they deserve.

Speaker 2 (00:22):
The fact they haven't reported anything so far, are they asleep?

Speaker 1 (00:26):
Well that's why I've asked them to get on and
do their job, which is to publicly report on this
information with a level of urgency. The first report will
be next Friday. They're collecting data now, but this is
something which we need a level of urgency on and
that's what I've asked them to do.

Speaker 2 (00:40):
What's your sense of it. Is it simply lack of
rain and hydro and when it rains it'll get fixed.
Or is this bigger and we need to deal to
it this time round.

Speaker 1 (00:49):
Well, there's two things here. Firstly, we are facing a
dry year. We have had low wind this year. But
the compounding and major factor here is we have had
a significant downgrade in our gas reserves, and that's because
of the last six years of demonizing gas. We haven't
had the production, we haven't had the investigations, we haven't
had the exploration, we haven't had the drilling that's needed

(01:11):
in order to give confidence to the gas market. So
the last government demonized gas, we're now reaping what they sowed.
And so that's why we're now having to look at
other options such as importing LNG to fill the gap.

Speaker 2 (01:21):
Right will we know about when? Will we know about
l and G?

Speaker 1 (01:24):
By the way, well, we've got a piece of work
underway at the moment around that. The governments are urgently
looking at what's required to make that happen. But there's
some pretty key decisions that need to be made, and
we also need to think about what the impact that
has on our domestics supply and also the ultrusting markets.
Some big decisions that the government's going to have to
consider on that issue.

Speaker 2 (01:45):
What about and I know what the power companies will say,
especially the gent Taylors. When Onslow was on the scene,
they didn't see the need to invest in any more capacity.
Is that a fair argument or not?

Speaker 1 (01:55):
Well, that was an absolutely fair argument from them at
the time, but we've taken that off off the table.
We've made it very clear that we're not going to
be building a big, massive onslow. But at the same time,
we need to see these guys investing. We need to
see investment in that and that's why we've got fast
Track coming down the line, so that we can make
it easier to build the generation New Zealand needs. And

(02:18):
for the short, medium and the long term.

Speaker 2 (02:20):
Why would they they're making money like this no tomorrow.

Speaker 1 (02:24):
Well, ultimately, that's why we also need to make it
easy for other people to enter the market too, and
that's what fast Track's all about. Make it easy to
get consensy enter the market so that you can have
more competition and more supply into the New Zealand ultricity
market for.

Speaker 2 (02:38):
The here and now. Having heard you, having heard Jones,
having heard Peters, are you guys actually going to do
something right here, right now or are you just jaw
boning this.

Speaker 1 (02:48):
We're taking this incredibly seriously. We're working very hard in
terms of the range of options. We're also working closely
with the gent tailors because ultimately they do have the supply.
We're working with Transpowers just come out last night saying
bring the consulting now and bringing forward contingent supply in
the lakes. That will be a big relief. And there's
other commercial negotiations underway at the same time which could

(03:11):
provide further relief. So there is a range of things
happening in the short term. There's also decisions we're making
around the medium term, and of course we've got fast trap,
which is around actually freeing up their ability to build
the generation this country desperately needs. Now.

Speaker 2 (03:22):
Put another hat on Palmerston North Mari Wards. They're already
consulting lawyers.

Speaker 1 (03:27):
You say, what, Well, the law says they have to
hold a referendum, and actually we thought this might happen,
so we actually put in the law that if the
council doesn't make a resolution, then the Electoral Officer is
required to hold that referendum. If the council decides to
refuse to bay the law, well.

Speaker 2 (03:42):
They had a vote and they're going to keep the ward.
So that means presumably they're going to go to a referendum.
They want to a referend them, yeah, they want to
avoid going to a referendum. So you are saying they
are literally wasting time and money on lawyers.

Speaker 1 (03:54):
Correct, and we foresaw this. The law actually says, even
if they try to stop at the electoral officer quant
to do it. For more from the Mic Asking Breakfast
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