Mike's Minute: More bluster, or real change for the electricity sector?

The Mike Hosking Breakfast

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6d ago 2:08

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We are apparently going to hear about major electricity sector reform from the Minister this coming week.

The final touches are being sorted.

Simon Watts calls them fundamental. He refers to the last time it was this major as being in the 90's.

So are they going to split the gentailers?

The Government's history would suggest no. They have been talking big on banks and supermarkets, and they've made plenty of announcements, but little has actually happened.

Why would this be any different?

This Government has also argued, rightly, that business likes consistency. When the last lot talked about Onslow and the lake and the hole in the ground, the industry stopped investing.

So would splitting the big players not cause the same trouble?

But in the report that is driving the Government's thinking we have seen an astonishing increase in the basic power bill.

In 2021 we spent $4.4 billion. The next year was $4.5 billion. In 2023 we spent $4.8 billion on power bills. In 2024 it was $5.2 billion.

So it's increased from $4.4 billion to 5.2 billion, and you wonder why you don’t have any spare cash.

On average the basic household power bill since 2023 has gone up $400 each and every year.

We can explain some of it on renewables. We need investment but we still haven't closed the gap. We still panic in winter, and that’s before you get to all the AI and data centres that will presumably suck us dry.

By the way, on the renewable front, Contact Energy are looking at pulling more water out of Lake Hawea. That’s if they can get past the locals, who of course hate it.

In that is part of the New Zealand problem – nimbyism. You can't moan about the bills and also moan about the solutions.

Everyone wants utopia, but don’t want to pay for it, or have any of it happen in their backyard.

So, stand by. Maybe it's fundamental, maybe it's a government looking to spin some more PR.

I think though what we all agree on is we need more power, and the damage the current scenario is doing to the economy can't go on.

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Mike's Minute: More bluster, or real change for the electricity sector?

The Mike Hosking Breakfast

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published 6d ago