Brownlee: 'Reward people who save power'

Gerry Brownlee. Photo / Greg Bowker

The Cabinet is today expected to consider a review of the electricity sector which proposes a consumer rebate for those who use less during power saving campaigns.

Reform of the Electricity Commission is also expected to be among a range of recommendations.

Energy Minister Gerry Brownlee announced in April a ministerial review of the electricity sector to look at security of supply, electricity affordability and the duplication of sector governance.

Yesterday he said when power generators asked the Government to run public conservation campaigns there should be a reward for consumers who saved.

"I'm enamoured of the idea that if, in fact, those who supply the industry come along to a minister of energy and say 'look it's really bad, we're going to have to have a public conservation campaign', then we have a mandatory arrangement whereby consumers are paid out for the power savings," Mr Brownlee told TV One's Q+A.

"You might start at something like $10 a week, direct rebate to consumers, and as the demand falls the payment rises."

Mr Brownlee believed the measure would make power companies be more prepared in tough years rather than always making the consumer bear the burden.

"I think that would mean that most of the generator retailers would say 'well look, we don't want to be that exposed', and I think we'd get a better, deeper hedge market as a result."

Mr Brownlee said it was time to shift the responsibility from the Government and consumers back on to power companies.

He was also critical of the Electricity Commission, which buys reserve power for shortages and levies the whole industry to pay for them.

"Effectively we've socialised the risk in the provision of electricity, the security of supply. I'd like to see that turned around."

Other concerns with the commission included duplication of effort, especially around new investments. He said the inter-relationship between Transpower, the Commerce Commission and the Electricity Commission would be sorted out.

A May Commerce Commission report said consumers had been charged $4.3 billion more than they would have been in a competitive market. The report said the big four generator-retailers didn't break the law but used their market muscle to maximise profits during dry years, raising prices 72 per cent between 2000 and 2008 while inflation went up 29 per cent.

Asked if he would commit to ensuring lower prices Mr Brownlee said: "I'm promising to make every effort to slow the increase."

Mr Brownlee said there were problems with the structure of the industry in New Zealand. "I think if we do things right we'll see a greater amount of competition in the retail area."

The Government may also better promote how consumers can swap between power retailers as part of a wider campaign.

"There needs to be more competition," he said.

The review would be released for public consultation once the Cabinet signed it off.

Labour MP Charles Chauvel said consumers would benefit more from smart metering, which the Parliamentary Commissioner for the Environment Jan Wright recently called for, than rebates.

"Labour strongly supports energy conservation, but making companies give a $10 discount every now and then won't do a lot to save money or change behaviour," Mr Chauvel said.

"Instead, Gerry Brownlee should do what the Parliamentary Commissioner has urged him to do, and set a standard for smart metering."

"Smart" meters were potentially capable of monitoring a household's electricity consumption, controlling appliances, and feeding information not only to the retailer but to the householder, which was shown overseas to produce savings of 5 per cent.

"This would save a lot more than $10 per week, and it would be an ongoing saving for Kiwi households," Mr Chauvel said.

- NZPA