Simon Watts: Energy Minister on the Government's new regulations for the energy sector

There's Government confidence new energy sector regulations will pressure down power prices.

Under Electricity Authority rule changes, our big four power companies must charge everyone the same price for supplying energy.

It's to stop the big gentailers giving themselves power discounts - and getting a competitive edge.

Energy Minister Simon Watts says it levels the playing field.

"The fact that these big gentailers can, in effect, cross-subsidise themselves means that the smaller players aren't getting a fair deal. These rules will stop them doing that, and as a result, we'll see more competition."

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Episode Transcript

Speaker 1 (00:00):
Together due to see, we have got new rules that
are being touted as bringing down our power bills. They're
going to force the electricity gen tailors to sell power
to their retail arms at the same rate that they
sell power to everyone else, bringing basically banning discounts to themselves.
Simon Watts is the energy minister Home Minister.

Speaker 2 (00:16):
Good a here, how are you?

Speaker 1 (00:17):
I'm well, thank you. Won't this actually make the power
that they provide more expensive because they're charging themselves more.

Speaker 3 (00:24):
No, the purpose of the changes is to mean that
when they they aren't going to be able to sell
it to themselves at a cheaper rate than what they
provide it to other independent players. What we've heard from
a number of participants in the market is is that
you know the fact that these big gen tailors can
in effect cross subsidize themselves means that the smaller players

(00:45):
aren't getting a fair deal. These rules will stop them
doing that and as a result we'll see more competition.
And more competition in the market means downward pressure on prices,
which is a major driver of cost of living at
the moment.

Speaker 1 (00:57):
This announcement today this come about as a result of
meeting last night.

Speaker 2 (01:02):
We've had a number of discussions.

Speaker 3 (01:05):
Actually, as Minister, I announced that we're going to do
this work probably four weeks into my role, and as
a result of announcements today we're basically doing it.

Speaker 2 (01:13):
So you know, it's an important step.

Speaker 1 (01:16):
Ignored my question as if I didn't answer, no, I did.
Is this announcement today as a result of the meeting
last night? Did you talk about it at the meeting
last night?

Speaker 2 (01:24):
Well, I have a lot of meetings. I'm a parliamental tennis.
Still ignoring my minister.

Speaker 1 (01:29):
Yeah, now listen, I mean, I you know whatever, This
is fine that you made this announcement. This is not
going to fix the electricity market. If you're having meetings
like the one you had last night, where's the actual plan.
We're two winters in with you guys.

Speaker 3 (01:41):
It is important that we take the steps that we're
taking around improving competition and particularly around the gene Taylor's.
We said we were going to do that and what
we're doing today is a become on.

Speaker 1 (01:50):
But Simon, you know, and I appreciate that you're making
an effort, but you know, and I know that you're
tinkering here right. You need to do something massive to
fix the electricity market. Where is that plan?

Speaker 3 (02:02):
So that plan is currently being considered by cabinet and
we will we make it.

Speaker 1 (02:07):
Is it being considered? Is it really being considered by cabinet?

Speaker 2 (02:11):
It is going to be considered in the coming week.

Speaker 1 (02:13):
Hold on, is it dinner or is it because you
said to me before, it is being considered by cabinet.
It is not being considered by cabinet? Is it?

Speaker 2 (02:23):
It will be considered by cabinet?

Speaker 1 (02:25):
Yes, Okay, how long is it going to take you
to come You haven't got a plan at the minute,
so how long is it going to take you to
come up with this plan.

Speaker 3 (02:31):
We're currently working through the plan and the decision and
Cabinet will consider that in short order, and as I've
said previously, I expect to make announcements of that in September.

Speaker 1 (02:42):
My frustration about this is Simon that what is going
on with electricity and energy in this country is one
of the biggest problems that we are facing, to the
point of it being a crisis. We are two winters
in with you guys, and we're about to go into
a third in a few months time, and there is
no plan. So are you going to have a plan
for something as big as this before we go into
the next winter with.

Speaker 3 (03:01):
You, we're currently working on a plan to deal with
the root cause issues that we're facing in the energy.

Speaker 1 (03:06):
Market, and will we have it before very.

Speaker 3 (03:10):
Yes, we will have that before next winter because we're
working through that. But as you know, this is a
complex and challenging area. I know that people want this yesterday,
but we are working through it very methodically to make
sure that we get it right. If we do something,
we need to make sure it deliversy outcomes that have
been identified, and that is a major focus and priority
for me.

Speaker 1 (03:31):
I think you're being unfair saying we wanted it yesterday,
but this is the second winter with you guys like
you guys, it's not I mean, I don't think that
that people asking for a plan now is being unreasonable.
I think probably your delays have been unreasonable, don't you think.

Speaker 2 (03:45):
I don't think it's unreasonable.

Speaker 3 (03:46):
I think it's to acknowledge the fact that actually the
solutions to the problems are complex and are challenging, and
so we've got to work through that in a thoughtful manner.

Speaker 1 (03:55):
But you know what you've got. You commissioned here's the problem.
You commissioned the Frontier report. You have got the Frontier
Reports sitting on your desk. It has been on your
desk for months and you've done nothing with it. So
when's that coming out?

Speaker 3 (04:05):
Well, no, I don't agree that we've done nothing with it.
We're working through how you would turn those recommendations into
an implementation plan to actually action and be sure that
that will derive the outcomes. That takes time and it
takes a number of experts.

Speaker 2 (04:18):
To be able to work through that.

Speaker 1 (04:20):
When's that reports coming out?

Speaker 3 (04:22):
We'll be publishing that when we make announcements following Cabinet's decisions,
which I expect will be in September.

Speaker 1 (04:27):
Excellent. Hey, thank you very much, Simon. I appreciate your time.
That's Simon. What's the Energy Minister?

Speaker 2 (04:32):
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Speaker 3 (04:36):
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