August 8, 2024 • 8 mins
The Energy Minister says rising power costs are because of low supply.
Heavy business users have warned spiking prices threaten their viability - including timber mills facing possible closure.
The Electricity Authority and Commerce Commission has been asked to look at whether power companies are price gouging.
The Government is also looking to import more liquefied natural gas.
Simeon Brown says the last Government's ban on gas exploration was detrimental.
"The key thing is that we have a shortage of energy - and that is what is driving this situation."
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Afternoon. Now, the government's announced more details on its replacement
for three waters, specifically what they're going to do with
the debt funding. They've announced that water bodies which will
be controlled by councils, will be able to borrow more
money and more cheaply from the Local Government Funding Agency
than they would be able to do by themselves. Sime
and Brown is the Local Government minister and with us now,
hey simeon good, how much more cheaply can they get
(00:23):
it from this funding agency?
Speaker 2 (00:25):
Well, if you go out and get access to deep
on the open market, which is what some councils do do,
it'd be about two percent more expensive. So this is
significantly cheaper. This is olgfas Triple A rated because of
the support that they get from coss guarantees from councils
in the support of Crown. They already fund councils at
(00:46):
exces international markets. And this is the best way to
be able to ensure that we can keep water assets
in local control. With local ownership, they can affordably make
those investments they need whilst also keeping costs down for consumers.
Speaker 1 (01:00):
Okay, and so are you just giving them a year's
worth of access to this money or does it continue
after that?
Speaker 2 (01:05):
No, this is this is, this continues after that. This
is this is an endurable solution for water infrastructure in
New Zealand. This is a deal being done to ensure
that we can allow counsels to invest in the long
term infrastructure they need in an affordable way. We don't
need the ten mega co governed entities the last government
(01:25):
was putting in place. All we need to do is
work with local government and have a solution which works
for them. And that's what this government's done in nine months.
Speaker 1 (01:32):
So I mean, why did that ferry just crash in Wellington?
Speaker 2 (01:36):
Well, I've just been on the phone to keew Rail
Lesban has high wind conditions down here are and a
number of other things which I think they're looking into.
Speaker 1 (01:50):
What are the number of other things?
Speaker 2 (01:52):
Well, I think the key rale CEO is here. We
spoke to him a few minutes ago in terms of
whether or not pay well you know, entering the particular
course correctly. Ultimately they'll be looking into that and have
more to say about that shortly. But there are high
wind conditions here in Wellington right now. Yeh.
Speaker 1 (02:10):
But that's normal, Samen, That's not really a surprise, is it? Okay?
So who puts the little course.
Speaker 2 (02:15):
In well I think those are the things that they're
looking into to ensure that the correct But.
Speaker 1 (02:21):
Is it the dude's on board? Are the guys on
the bridge?
Speaker 2 (02:23):
I mean, we've we've been making out point very clearly
around the operations of that organization that they need to
be lifting the game. And that's why we're refreshing the
board and we're going to be and we're sitting very
clear expectations doing it.
Speaker 1 (02:39):
But they keep on crashing the boat in the meantime,
don't they.
Speaker 2 (02:42):
Well, these things these exactly and the work that needs
to be dant to ensure that.
Speaker 1 (02:47):
Let me just get this clear, Samin, are you telling
me that while they're trying to birth in Wellington's somebody
there is the possibility and we are investigating that somebody's
put the wrong coordinates in.
Speaker 2 (02:57):
Look, I don't have all the answers. What I'm telling
you is we've been given a briefing around what's taken place.
It's being looked into, but the reality here is that
we need to ensure that that process goes is underway.
I want to make it very clear to the public
(03:18):
we have been unimpressed with the way key Rail has
been managing its assets and operations.
Speaker 1 (03:23):
But this is what an asset management problem is it.
I mean, I mean, this is just somebody being done.
Speaker 2 (03:29):
Well, we don't know all The answer is just you.
Speaker 1 (03:30):
Yes, well possibly possibly being done. How long is this
thing going to be out of commission for?
Speaker 2 (03:35):
I think a couple of days what I've been advised
man alive.
Speaker 1 (03:37):
Are you just pulling your hair out of these people?
Speaker 2 (03:41):
Well?
Speaker 1 (03:42):
Yes, okay, Now are you on board? This is really
the energy crisis is actually what I want to talk
to you about. Are you on board with Shane Jones's
idea of forcing gent tailors to charge less for power?
Speaker 2 (03:52):
Well, the reality is we have an energy shortage. That
is the key issue here at the moment, and that
is because of the last government's policies where they put
the ban on oil and gas in place. They added
this ridiculous twenty thirty target of one hundred percent renewal energy.
They chilled the market by saying they're going to build
a lake at the bottom of the South Island and the
Mountains called Lake Conzo, costing sixteen billion dollars. We have
(04:14):
an energy shortage crisis. That's the issue here. I do
have an update in terms of a number of key
things that are being done. Firstly, Transpower has just announced
that they will be starting consultation on changes to bring
forward hydrogenerators' ability to access contingent storage, so that is
(04:34):
being brought forward. That is a really important change it's
just been announced by Transpower in terms of bringing forward
that additional storage in those lakes and making that available
based on the risk curves that we're seeing. The Ultricity
Ultricty Authority also using their powers to commence an investigation
of the Section sixteen of the Altricity Industry Act into
(04:57):
spot pricing, including whether generators are profiting through the time.
I think it's really important to make it clear that
we need to have full assurances we're not seeing price
garging during this shortage, and I've made my expectations very
clear to the EA on that, and we are getting
advice on the powers around what needs to be done.
(05:18):
But I think the key message is that we have
a shortage of energy and that is what is driving
the situation. We do need assurances that there's no price
garging is not happening. We've got that work underway, but
we have an energy shortage as a country, and that
is the most critical issue we need to resolve.
Speaker 1 (05:35):
Okay, I'm glad you're saying that, because I feel like
Shane Jones is barking up the wrong tree with what
he's talking about. I'm going to get to that later.
But the energy shortage that we've got is primarily caused
by a gas shortage. So what are you doing about it?
Speaker 2 (05:48):
Well, that's why we've announced yesterday that the government is
looking at importation of liquid natural gas.
Speaker 1 (05:57):
Where would you store it?
Speaker 2 (05:59):
Well, is not required to be stored. This is something
which can be imported on ships and pumped into the
existing pipelines. The advice we've received is that this is
something that could be set up in a not a
short period of time, like a year away of time.
It would take some time, so we're getting further advice
(06:20):
around the speed and what was required in order to
do this. We're facing a dry year at the moment.
There's been low snowfall on the Southern Alps, which means
there's low storage down there. We're seeing low wind obviously
that the gas situation is worsened this year quite quickly,
and so we are putting this option on the table
because it's very clear that New Zealanders cannot afford to
(06:43):
see this shortage continuing.
Speaker 1 (06:45):
Still, for a gas producing nation to be important gas
does sound a little kooky. So what we actually need
to do is get the existing people in this country,
the existing investors, to be drilling and looking for more gas.
Are you making any headway there, Well.
Speaker 2 (06:58):
That's where we're repealing the oil.
Speaker 1 (07:01):
And case, but that's still not wanting to do it
because labor. If labor gets in in sixty years or
nine years or something, you're just going to do crazy
stuff that It's.
Speaker 2 (07:07):
One of our biggest issues we face the country is
around sovereign risk, yes, and all of these questions, and
that is because of that. There is the reckless decisions
made by the.
Speaker 1 (07:15):
Last Are you making any headway convincing them to put
money in or are you coming up with any ideas
to be able to kind of hold off Labour's crazy?
Speaker 2 (07:21):
There There is work underway in that space, and I'm
working very closely with Honorable Shane Jones on that.
Speaker 1 (07:27):
And when are we going to see it?
Speaker 2 (07:30):
Well, you'll be seeing We've made commitments around that legislation
coming into Parliament this year. Network is underway, but I
would just point I would just make the point of
and remind you listeners that the sovereign risk issue that
has been created by the previous government is a very
serious issue and it has been reckless and it is
it is one of the things which worries me the
(07:51):
most about the future of our energy security as a nation. Yeah,
we need energy as a country and what they did
has made fixing these problems a lot harder than they
should be.
Speaker 1 (08:05):
Sime and thank you, mate, appreciate it. Sim And Brown,
local Government Minister, Minister for Energy, Minister for Transport.
Speaker 2 (08:10):
For more from Hither Duplessy Allen Drive, listen live to
news talks it'd be from four pm weekdays, or follow
the podcast on iHeartRadio
Afternoon. Now, the government's announced more details on its replacement
for three waters, specifically what they're going to do with
the debt funding. They've announced that water bodies which will
be controlled by councils, will be able to borrow more
money and more cheaply from the Local Government Funding Agency
than they would be able to do by themselves. Sime
and Brown is the Local Government minister and with us now,
hey simeon good, how much more cheaply can they get
(00:23):
it from this funding agency?
Speaker 2 (00:25):
Well, if you go out and get access to deep
on the open market, which is what some councils do do,
it'd be about two percent more expensive. So this is
significantly cheaper. This is olgfas Triple A rated because of
the support that they get from coss guarantees from councils
in the support of Crown. They already fund councils at
(00:46):
exces international markets. And this is the best way to
be able to ensure that we can keep water assets
in local control. With local ownership, they can affordably make
those investments they need whilst also keeping costs down for consumers.
Speaker 1 (01:00):
Okay, and so are you just giving them a year's
worth of access to this money or does it continue
after that?
Speaker 2 (01:05):
No, this is this is, this continues after that. This
is this is an endurable solution for water infrastructure in
New Zealand. This is a deal being done to ensure
that we can allow counsels to invest in the long
term infrastructure they need in an affordable way. We don't
need the ten mega co governed entities the last government
(01:25):
was putting in place. All we need to do is
work with local government and have a solution which works
for them. And that's what this government's done in nine months.
Speaker 1 (01:32):
So I mean, why did that ferry just crash in Wellington?
Speaker 2 (01:36):
Well, I've just been on the phone to keew Rail
Lesban has high wind conditions down here are and a
number of other things which I think they're looking into.
Speaker 1 (01:50):
What are the number of other things?
Speaker 2 (01:52):
Well, I think the key rale CEO is here. We
spoke to him a few minutes ago in terms of
whether or not pay well you know, entering the particular
course correctly. Ultimately they'll be looking into that and have
more to say about that shortly. But there are high
wind conditions here in Wellington right now. Yeh.
Speaker 1 (02:10):
But that's normal, Samen, That's not really a surprise, is it? Okay?
So who puts the little course.
Speaker 2 (02:15):
In well I think those are the things that they're
looking into to ensure that the correct But.
Speaker 1 (02:21):
Is it the dude's on board? Are the guys on
the bridge?
Speaker 2 (02:23):
I mean, we've we've been making out point very clearly
around the operations of that organization that they need to
be lifting the game. And that's why we're refreshing the
board and we're going to be and we're sitting very
clear expectations doing it.
Speaker 1 (02:39):
But they keep on crashing the boat in the meantime,
don't they.
Speaker 2 (02:42):
Well, these things these exactly and the work that needs
to be dant to ensure that.
Speaker 1 (02:47):
Let me just get this clear, Samin, are you telling
me that while they're trying to birth in Wellington's somebody
there is the possibility and we are investigating that somebody's
put the wrong coordinates in.
Speaker 2 (02:57):
Look, I don't have all the answers. What I'm telling
you is we've been given a briefing around what's taken place.
It's being looked into, but the reality here is that
we need to ensure that that process goes is underway.
I want to make it very clear to the public
(03:18):
we have been unimpressed with the way key Rail has
been managing its assets and operations.
Speaker 1 (03:23):
But this is what an asset management problem is it.
I mean, I mean, this is just somebody being done.
Speaker 2 (03:29):
Well, we don't know all The answer is just you.
Speaker 1 (03:30):
Yes, well possibly possibly being done. How long is this
thing going to be out of commission for?
Speaker 2 (03:35):
I think a couple of days what I've been advised
man alive.
Speaker 1 (03:37):
Are you just pulling your hair out of these people?
Speaker 2 (03:41):
Well?
Speaker 1 (03:42):
Yes, okay, Now are you on board? This is really
the energy crisis is actually what I want to talk
to you about. Are you on board with Shane Jones's
idea of forcing gent tailors to charge less for power?
Speaker 2 (03:52):
Well, the reality is we have an energy shortage. That
is the key issue here at the moment, and that
is because of the last government's policies where they put
the ban on oil and gas in place. They added
this ridiculous twenty thirty target of one hundred percent renewal energy.
They chilled the market by saying they're going to build
a lake at the bottom of the South Island and the
Mountains called Lake Conzo, costing sixteen billion dollars. We have
(04:14):
an energy shortage crisis. That's the issue here. I do
have an update in terms of a number of key
things that are being done. Firstly, Transpower has just announced
that they will be starting consultation on changes to bring
forward hydrogenerators' ability to access contingent storage, so that is
(04:34):
being brought forward. That is a really important change it's
just been announced by Transpower in terms of bringing forward
that additional storage in those lakes and making that available
based on the risk curves that we're seeing. The Ultricity
Ultricty Authority also using their powers to commence an investigation
of the Section sixteen of the Altricity Industry Act into
(04:57):
spot pricing, including whether generators are profiting through the time.
I think it's really important to make it clear that
we need to have full assurances we're not seeing price
garging during this shortage, and I've made my expectations very
clear to the EA on that, and we are getting
advice on the powers around what needs to be done.
(05:18):
But I think the key message is that we have
a shortage of energy and that is what is driving
the situation. We do need assurances that there's no price
garging is not happening. We've got that work underway, but
we have an energy shortage as a country, and that
is the most critical issue we need to resolve.
Speaker 1 (05:35):
Okay, I'm glad you're saying that, because I feel like
Shane Jones is barking up the wrong tree with what
he's talking about. I'm going to get to that later.
But the energy shortage that we've got is primarily caused
by a gas shortage. So what are you doing about it?
Speaker 2 (05:48):
Well, that's why we've announced yesterday that the government is
looking at importation of liquid natural gas.
Speaker 1 (05:57):
Where would you store it?
Speaker 2 (05:59):
Well, is not required to be stored. This is something
which can be imported on ships and pumped into the
existing pipelines. The advice we've received is that this is
something that could be set up in a not a
short period of time, like a year away of time.
It would take some time, so we're getting further advice
(06:20):
around the speed and what was required in order to
do this. We're facing a dry year at the moment.
There's been low snowfall on the Southern Alps, which means
there's low storage down there. We're seeing low wind obviously
that the gas situation is worsened this year quite quickly,
and so we are putting this option on the table
because it's very clear that New Zealanders cannot afford to
(06:43):
see this shortage continuing.
Speaker 1 (06:45):
Still, for a gas producing nation to be important gas
does sound a little kooky. So what we actually need
to do is get the existing people in this country,
the existing investors, to be drilling and looking for more gas.
Are you making any headway there, Well.
Speaker 2 (06:58):
That's where we're repealing the oil.
Speaker 1 (07:01):
And case, but that's still not wanting to do it
because labor. If labor gets in in sixty years or
nine years or something, you're just going to do crazy
stuff that It's.
Speaker 2 (07:07):
One of our biggest issues we face the country is
around sovereign risk, yes, and all of these questions, and
that is because of that. There is the reckless decisions
made by the.
Speaker 1 (07:15):
Last Are you making any headway convincing them to put
money in or are you coming up with any ideas
to be able to kind of hold off Labour's crazy?
Speaker 2 (07:21):
There There is work underway in that space, and I'm
working very closely with Honorable Shane Jones on that.
Speaker 1 (07:27):
And when are we going to see it?
Speaker 2 (07:30):
Well, you'll be seeing We've made commitments around that legislation
coming into Parliament this year. Network is underway, but I
would just point I would just make the point of
and remind you listeners that the sovereign risk issue that
has been created by the previous government is a very
serious issue and it has been reckless and it is
it is one of the things which worries me the
(07:51):
most about the future of our energy security as a nation. Yeah,
we need energy as a country and what they did
has made fixing these problems a lot harder than they
should be.
Speaker 1 (08:05):
Sime and thank you, mate, appreciate it. Sim And Brown,
local Government Minister, Minister for Energy, Minister for Transport.
Speaker 2 (08:10):
For more from Hither Duplessy Allen Drive, listen live to
news talks it'd be from four pm weekdays, or follow
the podcast on iHeartRadio
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