Energy Crisis Looms

Energy Minister Pete Hodgson has failed to address pressing issues that threaten to undermine our energy sector with increasing frequency, ACT New Zealand Deputy Leader Ken Shirley said today.

"The basic problem is market failure, caused by inadequate pricing signals to consumers, compounded by emerging regional monopolies.

"The Labour Government's model that allows state-owned-enterprises to control both generation and retailing (gentailers) is a recipe for increasing disaster and chaos.

"All markets require good, transparent pricing signals to provide the incentive for consumer behaviour. It is clear that under a system emergency like we experienced for seven hours this week, optimum responses must be made.

"Home water heating should have been temporarily curtailed but the pricing signals could not be given because the lines companies control water heating but have no authority to shed the consumers of energy companies, even when a state of emergency strikes the national system.

"This week saw an unbelievable pricing spike- the typical base level price rose from 5c kwh to a high spot price of $93 kwh. Labour's Energy Minister Pete Hodgson is on record as stating he wants to drive the energy price up. His slavish adherence to the Kyoto Protocol, the intransigence of the Department of Conservation and the impossible delays associated with the RMA will all aggravate an already serious situation.

"The government's foolish adherence to the fundamentally flawed Kyoto Protocol will prevent the sensible utilisation of New Zealand's coal reserves.

"The Department of Conservation continues to block access to the Pike River coalfield and precludes the sensible expansion to the Arnold River power scheme on the West Coast. The RMA is an ongoing block to sound investment in the energy sector, with protracted delays holding up a number of power schemes and discouraging potential investors. With the closure of the Maui gas field looming, New Zealand will be facing an energy crisis with our major processing industries held to ransom by ridiculous energy prices, resulting from this Government's failure to address basic needs," Mr Shirley said.

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