CONSULTATION PAPER. TRANSMISSION PRICING METHODOLOGY
Submitter: VISION FAR NORTH Inc.
C/ R L Shepherd
RD1
KAITAIA
Submitting to Electricity Authority’s Transmission Pricing Methodology:
We are a community organisation which has a core interest in community development and the
interests of our local community, which in general terms is that extensive area serviced by Kaitaia
We have a history of lobbying and intervention.
We recognise that in terms of the conditions of this discussion paper there is potentially little value
in us raising issues of social equity, fairness or inter-generational equity despite us being concerned
with the following:
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the papers are not customer/end consumer focused.
the proposals are not fair in so much that many small businesses and homes in the Far
North will become energy poor.
“retrospective” charges will be punitive and non-selective.
The proposals have the potential to encourage off-grid development of distributed
electricity diminishing the value of existing infrastructure.
There seems to be no consideration given to issues pertinent to Tangata Whenua.
However, we make the following submissions:
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In the case of the Far North, Top Energy has in recent years invested in assets previously
owned and managed by Transpower. These have been upgraded, modernised and now are
more efficient and reliable. It does not appear that your discussion papers acknowledge this
situation nor is there any effective economic strategy for accommodating this situation.
Top Energy could well be forced into a situation, where with planned increases in generation
capacity from the Ngawha geothermal field (75mw potential), it will be rational to negotiate
alternative arrangements for connection to the national grid. This could well result in
destabilising the economic arrangements for other supplies to Northland including supply to
Marsden Point. It could also remove a load sharing potential for Auckland.
We consider that the philosophy behind your discussion papers is based on a very narrow
socio-economic model and has failed to ensure that it makes accommodation for ensuring
that regional development in the remoter parts of the country is supported by reasonably
priced electricity. Without a wider accommodation, remoter regions will increasingly
become a burden on the state while they should be seen as areas of rich development.
Viewing electricity as a stand-alone aspect of the national economy is insular and
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unacceptable. It needs to be viewed as an integral part of the “big picture” which your
proposals fail to do.
Specifically, our interest is focused on the Kaitaia catchment. Here we have one of the two
largest consumers of electricity in the Top Energy area, (Juken NZ.). This industry works on
very small margins and a vacillating market. Any increases in electricity distribution charges
as proposed by you will have the potential to make their operation uneconomic with a
closure and devastating effects on the local economy. We also must point out that dairy
farming in the area is highly dependent upon electricity with currently no capacity of farmers
to absorb increases in electricity distribution charges.
In our area, more than 10 % of the population is unemployed and more than
50% of the population have household incomes of less than $1100.00 per week. These
households are unable to absorb the 10% increases proposed in you discussion document.
While your proposal can potentially devastate our economy and possibly drive up
unemployment and decrease the average e household incomes it would also potentially
destabilise the national political balance of power. This will in turn result in less usage of
existing lines assets hence diminishing their effective use and value. We submit that you
must accept that you have responsibilities far beyond those purist economic models on
which you have based your paper.
We admit that we have struggled to fully interpret the models proposed by you. For us laypeople. We cannot follow your language or your reasoning. As you are aware, this
government made a commitment to the use of “plain English” in all official documents but
here you have failed to follow that mantra.
We respectfully submit that your proposal patently favours large consumers and
metropolitan areas at the expense of the poor, the isolated and the more remote areas of
the country. In our eyes this is untenable.
Overall, we do not see that any of your proposals will be acceptable to us.
For more information please contact:
rlshepherd@orcon.net.nz
09 4084192
R.L. Shepherd QSO FNZEAS ANZEI