Grey Power NZ Federation Inc. Energy Policy

Last reviewed 15/07/2015

Policy Mission

To establish in legislation, recognition that the supply of energy is a vital and essential service to all New Zealanders and to achieve a sustainable, secure energy industry that delivers affordable power to all households.

Problems the policy addresses

1. The current domestic electricity power price structure ignores both social and sustainability goals.
2. Failure to recognise power supply as an essential service has led to inequitable pricing structures and stifled the voice of domestic users in planning for the future.
3. The cost of reticulation is apportioned unfairly and is counter to goals of sustainability and social equity.
4. ‘Total cost’ invoicing prevents easy comparison between suppliers and is counter to the principles of free competition.
5. Domestic consumers especially those on fixed or low incomes lack the ability to manage their demand without loss of essential use.
6. The practice of using a secondary network within retirement villages where electricity is on-sold by the village owner, prevents consumers from taking advantage of market movements. ♠

The current mechanism for calculating wholesale power price encourages rent seeking behaviour. ♣

Policy solutions

• Regulate electricity as an essential service, which must be maintained regardless of financial constraints. (Govt, EA) (Addresses Problems 1,2 & 3).
• Domestic Household Consumers must have direct representation on all bodies concerned with electricity industry regulation. (EA, CC) (Addresses problem 2).
• Electricity invoices must be fully transparent and list each and every cost component. (EA) (Addresses problem 4).
• Provide a fiscal incentive to reduce energy use through the introduction of a reverse step tariff. (Govt., EA, CC) (Addresses problems 1, 3 & 5).
• Encourage the deployment of smart meters and easy data sharing to allow consumers to take advantage of time of use and demand pricing.

 

♠ Note. Further background research on the issue of embedded supply within retirement villages is required before a solution can be proposed.

♣ Rent, or occasionally Ricardian rent, is the difference between the actual cost of production and the marginal cost.