Simon Watts: Energy Minister on the proposed changes to the electricity sector

The Energy Minister says new rules for the electricity sector can't come soon enough. 

The Electricity Authority's proposing changes to give independent power companies the same access to prices and hedge contracts. 

Simon Watts hopes that will create a more level playing field. 

Power companies are hiking prices, and Watts told Mike Hosking things could get worse as we head into winter. 

He says conditions are dry, lake levels are lower than they were this time last year, and we still have a gas shortage. 

Watts says the situation is acute and he's worried. 

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Episode Transcript

Speaker 1 (00:00):
The power business heading to another winter, a price increases
in cold impiltation. Mike Rhant from Meridi and yesterday talked
to a lack of access to the contingent storage. Meantime,
the government gave the hard word as you're aware of
the gent tailors to tidy up there deals with the
retail arms and not stack the market anyway. Energy Minister
Simon Watts is with us.

Speaker 2 (00:16):
Good morning, very good morning, Mike.

Speaker 1 (00:17):
Greg Broad question, how worried about winter are you?

Speaker 2 (00:21):
I am worried, Mike. Situation is pretty acute. I think
most people know it's pretty dry out there at the moment.
Lake levels are lower than what they were at this
time last year. We still haven't got guests supply. That
means that it's going to be a tight winter and
that's why, as minister, you know, three weeks into the job,
I'm doing everything we can to make sure that we've
got secure and affordable energy. But it's pretty tough.

Speaker 1 (00:43):
Is what you said yesterday to the gen tailor is
going to make one jot of difference if we can't
supply and meet demand.

Speaker 2 (00:50):
Well, it is going to make a difference in the
medium term. The challenges is for this winter, and you
know that's what you know, a key element of focus
and other areas is. But what we're doing yesterday, it's
a strong signal to the market. We want to see
more competition. We want to make sure that you know,
they're playing on a level playing field, particky with independent retailers,

(01:11):
that they're not discriminating against other players. And you know
the regulator is going to be consulting on those changes
in the next eight weeks and bottom line, you know,
we need to be doing everything we can do to
keep the lights on this winter and for winters ahead.

Speaker 1 (01:26):
Did you say what you said yesterday because you needed
to say it or just fill some headlines? In other words,
are they scolus and are now going to have to tidy?
They're act up all? Were they decent players anyway?

Speaker 2 (01:37):
Now look like the circumstances are changed. You know, we
seem to, I think, talk about this. We seem to
have talked about this every winter. We need some action
and we need to see everyone playing their part. We
need more generation investment. Gin Taylor's play a key role
on that, but we also need a competitive market and
you know, I've had concerns alongside Minister Jones that we

(02:00):
don't have assessings right, and the regulator have come in
and said things need to change, and we're up for
that challenge and I think that's a good thing.

Speaker 1 (02:08):
We had the Meridian bloke on yesterday who said, one
of several things he needs greater access to the contingent supply.
Now you're going to tell me that's not in your domain.
It really should be, shouldn't it. Why can't he get
access If we've got water and it's eight hundred dollars
at the spot price, why can't we get access to
the water?

Speaker 2 (02:26):
Yeah, And look, I met with Meridian probably three dal
days into my role. The key issue is certainty around
that contingent supply, and the uncertainty is actually priced into
the market. I accept that the sector needs to know
when and how much of that contingent supply that it
can access, and I know that the regulator, and I've
asked the regulator to specifically look at this and get

(02:47):
back to me. It's not within my powers as a minister,
but I can tell you what in regards to the
government doing everything it can. You know we're leaving no
stone unturned and to secure energy this winter that's going
to include contingent hydro storage if needed.

Speaker 1 (03:02):
When you say the regulator, is that the EA or Transpower.

Speaker 2 (03:05):
It's actually a combination of both. But yes, Transpower and
the Electricity Authority play a role around that contingent storage.

Speaker 1 (03:12):
What is it the EA do because in watching the
last winter at eight hundred dollars a pop, they seem
to be sitting on their hands.

Speaker 2 (03:20):
Well, look, we've I've had a number of conversations pretty
straight up with all of the players in the market,
including our regulators, and saying status quo is not acceptable.
We need to see increased competition and you know, obviously
the regulator plays a key role in that. So we're
having a number of conversations at the moment to make

(03:41):
sure that everyone is a ligned up with what needs
to have.

Speaker 1 (03:43):
But conversations don't turn the lights on. Are they pushing
back against you? And will you need to do something
about that?

Speaker 2 (03:51):
Look, I think what you saw yesterday in terms of
the announcement so the regulator was a strong signal that
they have recognized clearly that we need to do more,
and we need to do more in the competition front.
That pressure is very high at the moment on everyone
and you know we're continuing to have those conversations. At
the end of the day, you're right, we need to
see action and we need to see some changes flowing

(04:13):
through and as minister that's my priority.

Speaker 1 (04:15):
Well, good luck with it. We're going to be on
your case. Simon Wat's the Energy Ministry. For more from
the Mic Asking Breakfast, listen live to news talks that'd
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