Richard Inder: Don't freak out over freak blackout

It is hard to stay calm when the power fails, but calm is needed. A cold shower on a winter morning evokes a visceral response from all but those of a mild disposition. After checking the fuse box and discovering the problem lies elsewhere, the natural response is to seek immediate remedy.

Across the economy this is writ large with recriminations, demands for the heads of Government ministers or company officials, calls for compensation, more investment or a shake-up of the regulatory regime.

Moreover, the failure is used by every special interest group to further their own aims. Well before Transpower traced this week's blackout to a shackle above the Otahuhu substation, lobbyists had claimed the failure for their own ends.

It was proof positive the national grid operator had under invested in the network or had been lax in maintenance.

It demonstrated the dire need for the transmission lines through the Waikato to Auckland.

It showed how the electricity regulatory regime had failed and the constraints the Resource Management Act placed on the development of national infrastructure.

It reinforced perceptions of a crumbling national grid, a network - and by proxy a nation - held together with bailing twine and number-eight wire.

None of these assertions has so far been borne out.

Transpower, not an organisation normally linked with special environmental pleading, said the controversial planning act and the failure were unrelated.

As Transpower noted, planned upgrades to the grid - such as raising the number of circuits into Auckland - may minimise the disruption caused by the failure. But they will never prevent such occurrences.

This week's failure followed a freak, one-in-twenty-year sequence of events that started with a shackle. Once it sheared, a so-called earthwire - equipment designed to protect the pylon from lightning strikes - fell into the substation and shorted-out the underlying equipment.

Such accidents happen even in the most developed economies. Half of London was left without electricity in 2003 when a backup circuit failed at the same time as the main circuit was down for maintenance. In the same year, more than 50 million people were left without power in the north east of the US.

Transpower's maintenance may well be found wanting and heads may roll. But the country is not in crisis, and the consequences of not recognising this are, perhaps, more serious than the damage suffered by Aucklanders over the last week.

Faced with such a barrage of complaints and calls for immediate and palpable change, politicians and public officials are placed in an invidious position.

The nominal offender in this case was Transpower - a state-owned enterprise with duties to generate a profit and maintain a reliable and secure distribution network.

Its chief executive Ralph Craven and chairman David Gascoigne have chosen to keep a low profile, but politicians have had no choice but to front up.

They have to be seen to be doing something.

Imagine the response this week if the Government had gone before the nation and attempted to separate the scare-mongering from the facts at hand?

It would have been accused of dithering, of failing to recognise the severity of the situation, or using the crisis for their own ends.

In such situations politicians can do nothing else but pander to the nation's insecurity and make promises, even if they are empty.

Acting Energy Minister Trevor Mallard, demonstrated as much when, on Wednesday, he said the Government would spend to fix whatever caused the problem, if necessary. In the same vein, Prime Minister Helen Clark said regulatory changes would be made if needed.

This is not a criticism of Clark and Mallard. In fact it is more praise for their handling of the situation.

Just as it is unwise to go to the supermarket while hungry, it would be wrong for the Government to be bumped into a rash decision on the electricity industry by the failure of a simple shackle.

The industry faces very real problems. The retail electricity market is not very competitive.

The national grid is old and large sections need to be replaced and divisive relations between the Electricity Commission, the industry regulator, and Transpower are causing a roadblock.

The country needs to find alternative sources of energy now that indigenous gas fields are running dry. The wholesale electricity market is poorly developed and it is perhaps limiting the growth of renewable energy resources such as wind.

These are but a few of the many complex and interrelated problems faced by the industry. But a rash decision driven by special interests rather than one that takes account of all stakeholders should be avoided at all costs.

If the Government is pushed in to a corner, future blackouts could last a lot longer than this week's.