Jon Duffy and Alan McDonald: Consumer NZ CEO and EMA Head of Advocacy on the Government's plan to address energy sector issues

The Government finally unveiled its plan to address issues impacting the energy sector, and it's prompted a mixed response.

The country's largest power companies have responded positively, and their shares have jumped on the NZX as a result.

Meanwhile, consumers and other businesses have voiced concerns this doesn't address the status quo.

Consumer NZ CEO Jon Duffy has criticised this announcement - and claimed this doesn't move the country forward at all.

"Let's remember - last year, one in five consumers had trouble paying their bill, 19 percent of people missed paying their bill on time, 56 percent of people are concerned about the price of energy. This does nothing to address that." 

EMA Head of Advocacy Alan McDonald says this announcement is 'underwhelming' - and claimed it wouldn't stop the closure of any mills.

"It's too late for that, there's nothing really in there short-term that offers and kind of assistance for those people already in that spiral, they're looking at tough decisions to close or downsize." 

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Episode Transcript

Speaker 1 (00:00):
Well, today's energy announcement has been labeled a damp squib, weak,
not bold, tinkering, short sighted, a missed opportunity. In short,
it's really hard to find anyone who really rates it.
With their reaction. We have John Duffy, the CEO of
Consumer New Zealand, and Alan McDonald, the head of advocacy
for the Employers and Manufacturers Association. High lads, Hi, Hi John, Alan,

(00:23):
Do you like us?

Speaker 2 (00:25):
No, it's thoroughly underwhelming. Really here the report, if it
did anything, there's a lot of talk around consensus and bipartisanship.
It probably united every part of the House in some
part of the report they didn't like. So it's pretty unerwhelming.

Speaker 1 (00:39):
Do you think it's going to stop the closure of
the mills?

Speaker 2 (00:43):
No. I think it's too late for that and there'll
be just there's nothing really in the short term that
offers any kind of assistance for those people already in
that spiral where they're looking at tough decisions to close
or downsize and all that sort of thing. If it's
driven by electricity prime, the.

Speaker 1 (01:00):
LNG terminal doesn't solve the problem.

Speaker 2 (01:03):
Well, it's at least two years away. If it's done fast.
It's going to cost, and the LNG that comes in
my understanding, is a bit about twice the price what
it is currently, So there's another price increase straight off
the bat, and it'll be too late for some of them.
There is a lot of market noise, a lot of
chatter about one of the big gas users pulling out

(01:23):
of the market in the next twelve to eighteen months
or so, and that might free up some more supply,
so that might help. But I think the one I
don't know which one it is. There's a lot of
speculation around that I couldn't really say, but I think
the one thing, if there's a positive out of it,
and it is a positive, that there's some kind of
certainty in a plan and a bit of direction, and

(01:45):
that might be enough to keep some of those businesses up.
What is we get some more well the third year
is we've got a plan. I mean, they've been sitting
on this thing for a month and but some pieces
of it have been leaking around the edge, which is
probably quite deliberate so they can fly you tites and
see what's going to work and what's not. But you know,
there's a lot of people have been paying a bit

(02:05):
of hope on this thing, and then we ended up
with something that's pretty underwhelming.

Speaker 1 (02:09):
Yeah, John, what do you think?

Speaker 3 (02:13):
Well, I'd probably take issue with the idea that there's
a plan. I actually I feel like this is people
kind of clambering around in the dark, kind of grasphold
or something to come up with solutions that might be
sellable to the public with an election year coming up
next year, but really don't move the country forward at all.
I mean, let's remember, you know, last year, one in

(02:36):
five consumers, you know, residential electricity customers, had trouble paying
their bill. Nineteen percent of people misspaying their bill on time.
Fifty six percent of people are concerned about the price
of energy. This does nothing to address that. It's Allan's
absolutely right when he says it's underwhelming, and it's it's
quite perplexing given the tough talk from the Minister of

(02:59):
Energy just a matter of weeks ago, talking about fundamental
reform to the sector, and you know what's been delivered
next to nothing.

Speaker 1 (03:08):
John, I don't know how much time have you spent
thinking about this. You have you guys actually had a
look at it and thought what would actually work to
bring down prices for residential customers.

Speaker 3 (03:18):
In terms of the report, you know, it's only been
out since this morning, so it's it's you know, I'm
still working through it. Yeah, it's a big piece of
you know, a big piece of analysis in my opinion.
In its essence, we need more supply, and ideally that
supply would be renewable, but we appreciate the fact that

(03:39):
we need firming generation to get us to a point
where we have enough renewable generation, so we are going
to have to rely on fossil fuels for a time,
but we what we need is a plan to get
us to a point where we have enough renewables to
meet demand and ideally would be building ahead of demand.
So there's actually a little bit of fat in the
system so that you know, we can innovate as an

(04:02):
economy and rely on their being reliable ultricity to support
that innovation.

Speaker 1 (04:08):
Absolutely. What would you do, Allan, what's the thing that
you would do to fix it?

Speaker 2 (04:12):
Well, I think some of the things that are already
happening really start in the next maybe two to three
to five years, will make a difference. The idea that
prices will come down to me, that's just a red hearing.
They might stabilize for a while, and in real terms
they might reduce, but that's still going up. We've already
talked about doubling the price of the LNG when it
comes in. But if you look at things like the

(04:34):
fast track legislation and particularly as that applies and coupled
with the AREMA stuff, that's going to make plugging into
the network easier, and the fast track plans for generation,
that's got to go faster. And I'd almost say, let's
have an exemption for renewables and just get them done.
And then you know there is a bit of gas

(04:57):
expiration going on and Graymouth controlling and bringing in you
supply new field. There's a lot of plans for solar
and wind. Let's get on with that. The deep or
geo thermal stuff sounds really promising. Why haven't we started
work on that, or if we have at subterranean, no
one knows about it. Why don't we look at another
hydro not a major one, but there's small hydro schemes

(05:20):
that can go in around the place, But that seems
to have been ruled out by the environmental lobby. I
don't know, but if you add those things together plus
a little bit of gas LNG import, plus the government
saying that it will support an equity raise. It's not
putting an extra money and it's not giving them cash.
It'll support an equity raise for some of those projects
if they stack up, and if the LNG terminal stacks up,

(05:42):
all of those things heading in the same direction, and
the planet huntley to bring in more coal. I mean,
who's thought coal would be the answer? But the plan
there with the three big gent tailors getting together and
putting in that stockpile, that helps. But the rank and
engines of forty plus years old and running out, and
so with the engineers that know how to fix them,

(06:03):
so you know, that's something we've got to fix. Maybe
a bit of diesel comes in there as well, which
we closed all the diesel plants about fifteen or twenty
years ago. Now we're looking at doing them again. So
that kind of stuff. It's back to the future stuff.

Speaker 1 (06:16):
It was just wild, isn't it.

Speaker 2 (06:17):
Hey?

Speaker 1 (06:17):
Guys, Thank you appreciate both of you input there. That's
John John Duffy, you've consumed in New Zealand. Alan McDonald of

Speaker 3 (06:22):
MA for more from hither Duplessy, Alan Drive, Listen live
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