A Labour alternative on power pricing, energy and regional development

Press, 22 November 1980, Page 14

A Labour alternative on power pricing, energy and regional development

MIKE MOORE. Labour's shadow Minister for Regional Development, responds to the article by Mr B. E. Brill, Parliamentary Under-Secretary to the Minister of Energy, which appeared on this page on November 11.

The only new fact to emerge from Mr Brill’s official statement on power pricing was that his caucus had discussed the issue and that it had been raised by South Island members of Parliament. It is obvious that there was little sympathy for the cause of a power price differential from Mr Brill or the National Party. Before I was elected to Parliament representing Papanui, I raised this matter. In fact. 1 distributed a "phoney” power bill to attract attention to the issue. At the time I received considerable abuse for suggesting there was a differential. Since then power prices have risen by nearly 100 per cent. Investigations and research by the Labour Party have shown that more than half of every power bill goes to the Government to repay interest on the loans the Government raised to pay for the original power projects, that is, the interest which the Government pays on loans it borrows from itself. The Government has doubled its own interest rates from the rate that was charged when Labour was the Government. It is an astonishing way for a Government to raise revenue on the sly. Half of every power bill goes, not to the local power authority, not on wages to the electricity staff,

not to the bureaucrats, but back to the Government itself t 0 pay the interest on loans raised years ago. It is a means of raising more revenue. a form of indirect tax. It is interesting that the Under-Secretary of Energy mentioned neither the doubling of interest rates nor that the Government has doubled the price charged to the power authorities. In spite of some very dubious climatic comparisons between some North Island and South Island towns, the fact remains that on average it is colder in the South than the North. Not even the eloquence of Mr Brill can change that. Actually, the Government has gone half way already towards adopting’ Labour’s policy on power pricing, but has restricted it to commercial and industrial consumers whose power bills are tax deductible anyway. The argument for a common, national power price might have some validity except that Government has already half-conceded its lack of validity by giving a 25 per cent rebate to industry but not to families and domestic consumers. It is also a fact that many North Island consumers already have natural gas or expect to have it soon. Christchurch has lost its gas works and has the worst air pollution problem in New Zealand. Again Mr Brill’s

eloquence cannot change the facts of Christchurch's geography nor the fact that Christchurch has had pollution at times as bad as any in Los Angeles. Every local organisation, from the Clean Air Society to South Island local bodies, has campaigned for a domestic differential. These are respected South Island groups which deserve better from the National Party. We see a need for a differentia! for all the reasons mentioned earlier, but it will also be a boost to regional development. The reason so many South Islanders are against the smelter is that it will use more power jhan the rest of the South Island — that is than consumers and industry other than the Comalco plant at Bluff. Is it any wonder people are angry when they see multi-nationals purchasing power at a cheaper price than ordinary ratepayers? Mr Brill also forgot to mention that in the transmission of power from the South Island to the North Island there is a major loss. Doesn’t it make sense to encourage the use of the resource close to its base? Isn’t that why natural gas is going to Auckland first rather than to the South Island? Labour is pledged to extend the power differential to domestic consumers and will encourage the distribution authorities to reorganise themselves so that the benefits are felt by families in the South Island. This is not just a hand-out for the South. It is part of a consistent, over-all regional development and energy plan for the re-

construction of South Island industry and to provide a better deal for all. There is no doubt that the energy and regional development policies of the present Government have failed. We have the highest unemployment. lowest growth and biggest migration loss in the South. What we need i* a coherent development programme for Christchurch and Canterbury which will include extending the airport, bringing sense back to our transport system and giving loans to those who wish to invest in industry that adds value to primary products. The Got eminent's energy policies have failed. Carless days were a proven flop. Banning petrol sales on Saturdays did not work. The Labour Government had planned to build a pipeline from Marsden Point to Auckland which would nave been a cheaper form of transporting our oil. would have employed people and would have been the most effective means of storing oil. Mr Brill is now selling the pipes to overseas companies. Nothing has been done with compressed natural gas. Here is an opportunity that involves low technology, natural resources and will save overseas funds, yet the arguments are still continuing between the Government and the big companies which are fighting and competing to have their particular schemes approved; New Zealand must aim to be self-reliant for its energy needs as soon as possible. Quite apart from the energy question itself, the economics

of a policv of import substitution for our energy needs will go a long-way towards solving our now chronic balance-of-payments problem. There can be no doubt that this is technically possible, and it is now likely to be economically possible and desirable, given known technology and the likelx supply/pr’ice situation-for ml imports. Regional development is tt key factor in I'utute energy production and consumption. The objective must be to utilise the natural resource available either on site for energy generation anil/or as a primary source of energy, i e gas should be used as gas;' coal as coal Where possible, forms m tuel and power from renewable, indigenous resouices should be accorded highest priority. There must be everv encouragement lor the development of small plants and projects — by industries, loc.il author-,lies.' groups and individuals. The Ministery ol Energy must be charged with the authority to plan develop and co-ordinate New Zealand s energy, in both the short and the long term. All aspects of the planning and impact reporting must be subject to public scrutiny. Everv encouragement should be given to local supply authorities to merge into wider regional authorities. They should develop local power resources, be responsible tor reticulation of energy, and set local charges within an over-all concept oi regional development. At the present time we have developed some 3500

MW in hydro stations. We will have another 5000 MW for development up to the year 2000. and there is still a further 2000 MW that could be developed after that date. Although some of this will be difficult and increasingly expensive, it will be better in every sense, including environmentally than any other alternative. The hvdro potential includes 1000 MW in additional small projects sponsored by local authorities and possibly industry. These schemes must he made feasible in relation to the cost of buying -'nationalgrid" electricity. Labour envisages a new era in which territorial local authorities can make a significant contribution. As with other sources of energy, possibilities that were once considered uneconomic are now viable and should be developed in the regional and national interest. Nevertheless Labour, lor the sake of the last “I per cent of power” will not wreck a valley as National ha< needlessly wrecked the Ulutha. There must be a balanced view. In revising domestic power tariffs. Labour will also give every encouragement to save power by the introduction of a series of graduated tariffs, based on fair criteria as to size of households, so that householders making the greatest efforts to conserve power will benefit, and those wasting power will be penalised. Wasteful users will subsidise the needy users. The unfair penalties on families inherent in the present pricing policy will be removed.