Energy Minister Judith Collins has rejected a high-powered lobbying campaign to get the Electricity Authority to back down on its proposed changes to power pricing.
The changes which will apply to the transmission charges charged by Transpower to electricity retailers will raise prices in Auckland and Northland while they drop prices everywhere else.
The Auckland Employers and Manufacturers’ Association and Trust Power have headed the campaign against the proposals. It has been supported by some electricity retailers, the Auckland Chamber of Commerce, the papermaker, Norskog and the Northland District Council.
But there are also big winners.
The Tiwai Point aluminium smelter near Bluff is the biggest.
It costs $918 million to run New Zealand’s 12,000km national grid, and the smelter has to pay over $60 million a year of that cost.
It only uses one 160km power line, from Manapouri to Tiwai Point, and argues it should not have to pay for wires over 1000 km away in Northland or Auckland.
The Electricity Authority’s reform proposals would lower those costs from more than $60 million a year to somewhere between $41 and $47 million.
Invercargill Mayor Tim Shadbolt says that is not nearly good enough.
“We are going to fight it all the way,” he told RNZ in January.
However while Shadbolt wants the smelter bills reduced that can only come by raising prices in other parts of the country – and the Electricity Authority has proposed that the Auckland area and Northland would bear the brunt of any cost increases.
The CEO of Auckland’s Employers and Manufacturers’ Association, Kim Campbell, says the process the Authority has used to calculate the new charges is deeply flawed.
He claims they have made serious errors in the calculations and argues that they should start the process all over again.
Collins says that she does have the power to review what the Authority does
But she pointed out to POLITIK that they had been reviewing the charging regime for ten years.
“There are all sorts of things happening that have been threatened by various people about what might or might not happen.
“My inclination is to step back and let them get on with their job.
“There have been threats of court action, all sorts of things.
“Let’s see if things go down that path.
“I think a decade of review is probably enough without me asking hem to do it all over again.”
There is a political risk in Collins’ predictable unwillingness to intervene in the process.
Auckland is one of the areas hardest hit.
But so also are industrial plants in the Bay of Plenty and Northland.
NZ First’s Energy spokesperson, Fletcher Tabuteau says “Plans for a $300 pulp mill at Ngawha, near Kaikohe, which would have created hundreds of jobs in struggling Northland were scuppered because of the proposed charges.
“NZ Steel and Norske Skog are other major industrial plants and big employers that are just hanging on because of high power prices,” he said.
“The fat-cats at the Electricity Authority are little more than tin-pot dictators.
“It has not commissioned any independent expert reviews, has failed to engage with both submitters and their experts, and has refused to entertain cross-submissions.”
However Collins’s refusal to intervene means that the campaigners can only take court action.
The political campaign is over.