John MacDonald: RMA changes only part of the solution to our power puzzle

Canterbury Mornings with John MacDonald

If you’ve heard all the talk over the past 24 hours about the Government making more changes to the Resource Management Act and you’ve thought ‘oh boring, nothing to do with me’, think again.

Because there’s one aspect that has potential to make a difference for anyone and everyone in the country. Which includes you.

I don’t think it’s going to be enough on its own. Because, if you don’t need cheaper power bills, then you’re shouting drinks tonight.

So I think a lot more than what the Government is proposing to do with the Resource Management Act is needed. But I’ll get to that.

What happened yesterday, is the Government announced more changes it wants to make to the RMA - the Resource Management Act - which is the legislation that sets out all the rules and requirements in place to protect the natural environment.

To make sure we don’t go all “get stuff done” and “you can’t stop progress” on it, and then look up and realise that we’ve stuffed the environment while we’re doing it. I know some people will argue that we’ve still managed to stuff the environment. But that’s what the RMA is all about.

In essence, it lays out all the hoops people and organisations and companies have to jump through before they can do things like set-up a new power station.

And this is the aspect of the changes announced yesterday that is most relevant to the here-and-now.

The here-and-now where wholesale electricity prices in New Zealand are seven-times higher than what they were three years ago.

Which is why we’ve seen some big manufacturing plants either closing down completely or putting things on hold for a bit until the power prices start to come down a bit. And the Government’s talking about interim fixes, such as importing more liquefied natural gas.

They’ll do that. And they’ll keep putting the heat on the four big electricity generation companies. Which not only generate the power, they also sell it to us. So this is Meridian, Contact, Genesis and Mercury.

But the more power there is, the lower their profits. Simple as that. Which is why I think the Government’s plan only goes part of the way towards giving a more sustainable electricity system and market.

What I think needs to happen, is the control these four big companies have over things needs to change.

And the most straightforward way of doing that, is changing the way things are structured - and separating power generation from power retailing. That’s why people refer to these companies as GenTailers - they make the electricity and they sell it.

I don’t see things changing all that much until we rip-up the current structure and tell Meridian, Contact, Genesis and Mercury that they’ll make the power, and other companies will sell it to us.

That way, they could only charge what the market is willing to pay. Instead of the other way ‘round, as it is now.

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