Watchdog's report gives power industry a roasting

Our houses are cold, the power industry is "stubbornly wedded" to increasing supply by building bigger projects and electricity prices have kept rising.

Those are the findings of the country's chief environmental watchdog, Parliamentary Commissioner for the Environment Dr Morgan Williams, who yesterday released his "Electricity, energy and the environment" report.

Overall the report gives a fail mark to an industry which has a critical impact on the environment.

Politicians needed to come to a cross-party agreement on the industry and put a long-term strategy in place, Dr Williams said.

"As long as you have sharp divisions across the political spectrum you won't get consistency," he said.

New Zealand had the coldest houses in the OECD yet power companies were not taking up technology to reduce household power bills.

One example was "Smart meters" that transmit household power usage electronically to the retailer - doing away with meter readers - showing consumers what they were using every half hour. The meters, which could reduce bills by 10 per cent, were being installed in Australia and Canada but were only on trial here.

Dr Williams came out swinging against Mighty River Power's controversial plan to refire the Marsden B power station.

"A coal-fired power station, not even a state-of-the-art one, in this decade, in this century?

"What else do you need to say?"

This report, the first by the commissioner examining the power industry over a full year and which will be updated annually, looked at the industry as a whole. It also focused on the job of the Electricity Commission, set up to oversee the industry.

The report said the commission's advisory groups were weighted in favour of industry because the power system was so difficult for lay-people to understand.

"The reforms of the 1990s have left us with an extraordinarily complex system," Dr Williams said.

The price per kilowatt for residential consumers had risen 11c to 15c between 1990 and 2004, which wasn't a bad thing "because it hadn't reflected its true cost", he said.

Electricity Commission chairman Roy Hemmingway said some of the report's recommendations were already under way. "I think there are some things the commissioner would like us to move more swiftly on but I think generally there is nothing we particularly disagree with."

Energy retailer and lines company Vector said it had investigated alternative energy sources such as wind and solar generation.

But "short-term security of supply" was an issue and it had told the Government of the need for greater investment in the transmission system.

Environmental failings

* Major power companies which favour building more big generation projects dominate.

* The Government's hands-off approach to recommissioning the coal-fired Marsden B power station.

* No incentive for lines companies to minimise energy losses.

* Advisory groups to Electricity Commission dominated by wholesalers not consumers.