1 00:00:00,240 --> 00:00:03,480 Speaker 1: Good to have you with is a seven past five right. 2 00:00:03,480 --> 00:00:06,160 Speaker 1: The government has told the Electricity Authority to get more 3 00:00:06,200 --> 00:00:10,720 Speaker 1: competitive as it tries to curb soaring electricity prices. We 4 00:00:10,840 --> 00:00:14,640 Speaker 1: all know as of late energy costs have been rising, 5 00:00:14,720 --> 00:00:17,960 Speaker 1: with multiple large manufacturers saying prices have forced them to 6 00:00:18,000 --> 00:00:21,639 Speaker 1: close down. Energy Minister Simon Brown outlined expectations and a 7 00:00:21,680 --> 00:00:25,200 Speaker 1: government policy statement which the authority must now adhere to 8 00:00:25,760 --> 00:00:29,200 Speaker 1: as it works to fix the market. And as Simeon 9 00:00:29,280 --> 00:00:31,120 Speaker 1: joins me now, good evening, thank you for your time. 10 00:00:32,479 --> 00:00:35,240 Speaker 2: Good evening, Simeon, are you confident. 11 00:00:34,920 --> 00:00:37,760 Speaker 1: These expectations will ultimately bring prices down? 12 00:00:39,560 --> 00:00:42,480 Speaker 2: Well. What we're making very clear is that the government's 13 00:00:42,560 --> 00:00:45,440 Speaker 2: top priority is to ensure that New Zealand kiwis even 14 00:00:45,479 --> 00:00:51,360 Speaker 2: businesses and households have accessed internationally competitive ultracy prices. That 15 00:00:51,400 --> 00:00:55,200 Speaker 2: the Aultriscty Authority needs to ensure that they are focused 16 00:00:55,320 --> 00:01:00,600 Speaker 2: on competition, affordability and security of supply and that they're 17 00:01:00,600 --> 00:01:04,320 Speaker 2: not focused on what type of fuel is actually being used. 18 00:01:04,800 --> 00:01:06,640 Speaker 2: We've been very clear as a governments that actually we 19 00:01:06,680 --> 00:01:09,120 Speaker 2: want to keep the lights on, and that means they 20 00:01:09,160 --> 00:01:10,840 Speaker 2: need to make sure the market is operating in a 21 00:01:10,880 --> 00:01:14,520 Speaker 2: competitive way to deliver that affordable energy to New Zealanders. 22 00:01:14,760 --> 00:01:19,520 Speaker 1: So those expectations are the competitive, good, supply and affordability. 23 00:01:18,880 --> 00:01:23,440 Speaker 2: Right, that's correct. That's the key focus the government's focused on. 24 00:01:23,520 --> 00:01:29,119 Speaker 2: Under the last government they were pursuing significant interventions into 25 00:01:29,120 --> 00:01:32,480 Speaker 2: the ultriacy market, such as the Lake Conslow scheme they 26 00:01:32,480 --> 00:01:36,080 Speaker 2: were making. They were at a policy of one hundred 27 00:01:36,080 --> 00:01:39,760 Speaker 2: percent renewable energy by twenty thirty, which would have caught 28 00:01:40,040 --> 00:01:42,680 Speaker 2: the country billions of dollars to try and achieve. We've 29 00:01:42,680 --> 00:01:45,360 Speaker 2: been very clear with full agnostic. We know that there 30 00:01:45,400 --> 00:01:49,480 Speaker 2: is going to be more renewable generation becoming online. However, 31 00:01:50,200 --> 00:01:55,080 Speaker 2: the Ultricty Authority's role is to focus on competition, security 32 00:01:55,120 --> 00:01:59,440 Speaker 2: of supply and reliability for consumers rather than what type 33 00:01:59,440 --> 00:02:00,720 Speaker 2: of fuel is being consumed. 34 00:02:01,480 --> 00:02:06,040 Speaker 1: Yes, of course, reliability apologies. How does the electricity authority 35 00:02:06,320 --> 00:02:10,200 Speaker 1: therefore enforce these expectations that you've put on them? 36 00:02:10,720 --> 00:02:14,440 Speaker 2: So the government sets the policy direction and that is 37 00:02:14,480 --> 00:02:18,919 Speaker 2: what we've done today. The Ultrucy Authority is required to 38 00:02:18,919 --> 00:02:21,359 Speaker 2: have regard to that as they make decisions in regards 39 00:02:21,400 --> 00:02:24,160 Speaker 2: to the code. They play a really important role in 40 00:02:24,200 --> 00:02:27,040 Speaker 2: terms of regulating the market. There's a lot that they 41 00:02:27,720 --> 00:02:29,680 Speaker 2: they have that they need to do in terms of 42 00:02:29,680 --> 00:02:32,840 Speaker 2: responding to this, we want to see more distributed forms 43 00:02:32,840 --> 00:02:35,639 Speaker 2: of energy able to participate in the market. We want 44 00:02:35,680 --> 00:02:39,560 Speaker 2: to see more competition in the wholesale market. They'll have 45 00:02:39,639 --> 00:02:43,359 Speaker 2: that they have the role of regulating participants to do that. 46 00:02:43,480 --> 00:02:46,000 Speaker 2: But also it's about setting a clear expectation to wholesale 47 00:02:46,040 --> 00:02:49,120 Speaker 2: participants that they need to manage their risks more appropriately. 48 00:02:49,160 --> 00:02:52,440 Speaker 2: What we saw this year with the wholesale wholesale price 49 00:02:52,560 --> 00:02:56,120 Speaker 2: being eight hundred dollars a mega what now for many 50 00:02:56,240 --> 00:03:00,160 Speaker 2: for a number of weeks through August was unacceptable to 51 00:03:00,160 --> 00:03:02,040 Speaker 2: make sure the fuel is in the right place to 52 00:03:02,160 --> 00:03:05,519 Speaker 2: manage those dry year risks rather than that risk being 53 00:03:05,600 --> 00:03:09,400 Speaker 2: externalized out onto KEII households and businesses. That's unacceptable and 54 00:03:09,440 --> 00:03:11,480 Speaker 2: our message is very clear to the optus, the authority, 55 00:03:11,480 --> 00:03:14,200 Speaker 2: and to wholesale participants that that risk needs to be 56 00:03:14,200 --> 00:03:19,560 Speaker 2: better managed to ensure that key households and businesses aren't 57 00:03:19,560 --> 00:03:21,680 Speaker 2: facing the brunt of those high prices. 58 00:03:22,080 --> 00:03:24,760 Speaker 1: So as a household, when can I expect to see 59 00:03:24,760 --> 00:03:27,120 Speaker 1: the impact of this GPS. 60 00:03:28,320 --> 00:03:32,560 Speaker 2: Well, ultimately, this is about setting our expectations clear. The 61 00:03:32,639 --> 00:03:36,040 Speaker 2: regulator now has to put a work program together around 62 00:03:36,480 --> 00:03:39,080 Speaker 2: how they intend to give effect to it. They will 63 00:03:39,400 --> 00:03:42,440 Speaker 2: have regard to it, they will be there's a number 64 00:03:42,440 --> 00:03:44,800 Speaker 2: of changes that they need to continue to evolve as 65 00:03:44,800 --> 00:03:48,720 Speaker 2: there's different forms of becoming online. Ultimately, this is about 66 00:03:49,720 --> 00:03:54,080 Speaker 2: our expectations so that the market is operating more competitively 67 00:03:54,560 --> 00:03:57,400 Speaker 2: to deliver that those prices to consumers. In terms of 68 00:03:57,400 --> 00:04:02,600 Speaker 2: the impactful consumers, we're obviously very clear that the Electric 69 00:04:02,720 --> 00:04:05,080 Speaker 2: Authority has to be very focused on next winter. Next 70 00:04:05,120 --> 00:04:09,200 Speaker 2: winter is looking like a very tight winter again like 71 00:04:09,280 --> 00:04:13,200 Speaker 2: this winter, So acting now in terms of making sure 72 00:04:13,240 --> 00:04:17,680 Speaker 2: that wholesale participants are managing those risks rather than those 73 00:04:17,760 --> 00:04:22,520 Speaker 2: risks being are coming to fruition in the middle of winter. 74 00:04:22,560 --> 00:04:25,400 Speaker 2: They need to be managed before Christmas in terms of 75 00:04:25,440 --> 00:04:27,440 Speaker 2: making sure the fuel is there in the right places, 76 00:04:27,800 --> 00:04:30,360 Speaker 2: rather than us entering next winter with those risks in place. 77 00:04:30,480 --> 00:04:32,840 Speaker 1: So then you would expect next winter the market has 78 00:04:32,880 --> 00:04:37,240 Speaker 1: reacted and we can all enjoy more competitive affordable power prices. 79 00:04:37,960 --> 00:04:41,039 Speaker 2: Well, Ultimately, you know, the outlook for next winter is 80 00:04:41,839 --> 00:04:46,240 Speaker 2: concerning in terms of there is significant risks in place 81 00:04:46,279 --> 00:04:49,360 Speaker 2: in terms of you know, what we saw this year 82 00:04:49,400 --> 00:04:54,360 Speaker 2: around low hydro inflows low wind Some of the forecasts 83 00:04:54,400 --> 00:04:57,760 Speaker 2: are concerning again for next winter. But what our message 84 00:04:57,800 --> 00:05:00,000 Speaker 2: is to the ultricy Authority and to the market participate 85 00:05:00,640 --> 00:05:03,600 Speaker 2: is that those risks need to be managed ahead of 86 00:05:04,000 --> 00:05:06,800 Speaker 2: entering winter rather than being managed during winter. And I'll 87 00:05:06,839 --> 00:05:10,440 Speaker 2: give you an example around You know, we had a 88 00:05:10,640 --> 00:05:15,680 Speaker 2: twenty percent reduction in gas supply this this year, and 89 00:05:15,720 --> 00:05:18,280 Speaker 2: that's a number of reasons behind that, including the last 90 00:05:18,360 --> 00:05:21,560 Speaker 2: government's ban on oil and gas exploration, but the key 91 00:05:21,640 --> 00:05:25,920 Speaker 2: issue was that that gas wasn't you know, methdex is 92 00:05:26,200 --> 00:05:30,360 Speaker 2: the largest user of gas. That gas has been used 93 00:05:30,360 --> 00:05:33,000 Speaker 2: to make methanol rather than put into the eltricity market, 94 00:05:33,040 --> 00:05:35,200 Speaker 2: and that deal wasn't done until the middle of August 95 00:05:35,520 --> 00:05:38,400 Speaker 2: to actually ensure that was being made available to produce electricity. 96 00:05:38,800 --> 00:05:41,560 Speaker 2: Those type of arrangements in making sure the fuels in 97 00:05:41,560 --> 00:05:45,279 Speaker 2: the right place, those conversations and those arrangements need to 98 00:05:45,279 --> 00:05:48,400 Speaker 2: be need to be sorted ahead of time. Risks need 99 00:05:48,440 --> 00:05:50,719 Speaker 2: to be managed. Securio supply to be managed in the 100 00:05:50,760 --> 00:05:53,440 Speaker 2: long term, not just the short term, so that consumers 101 00:05:53,480 --> 00:05:56,719 Speaker 2: and businesses aren't put in those risky positions as we 102 00:05:56,720 --> 00:05:57,320 Speaker 2: saw this year. 103 00:05:58,080 --> 00:05:59,920 Speaker 1: Minister, if you wouldn't mind. Would you mind taking it 104 00:06:00,080 --> 00:06:02,360 Speaker 1: energy hat off and just putting your local government hat 105 00:06:02,400 --> 00:06:04,280 Speaker 1: on just for a quick moment. What did you think 106 00:06:04,320 --> 00:06:08,240 Speaker 1: about Wellington City Council's decision on the airport shares yesterday? 107 00:06:08,400 --> 00:06:09,720 Speaker 1: Do you think the Government will end up. 108 00:06:09,680 --> 00:06:13,440 Speaker 2: INTERVENI well, look, I think it's concerning. Ultimately, it's a 109 00:06:13,480 --> 00:06:18,120 Speaker 2: significant decision to make a significant it's a significant change, 110 00:06:18,160 --> 00:06:21,360 Speaker 2: will propose change to their long term plan. My concerns 111 00:06:21,360 --> 00:06:24,480 Speaker 2: for Wellington ratepayers and the potential impact this may have 112 00:06:24,640 --> 00:06:27,200 Speaker 2: on their rates bills. They've already received one of the 113 00:06:27,279 --> 00:06:30,880 Speaker 2: highest rates bills in the country and so look, the 114 00:06:30,920 --> 00:06:33,720 Speaker 2: Government's keeping an eye on what's happening here. Councils are 115 00:06:33,839 --> 00:06:36,720 Speaker 2: able to amend their long term plans. But what I 116 00:06:36,760 --> 00:06:40,360 Speaker 2: would say is this is concerning. It is a significant change. 117 00:06:40,760 --> 00:06:42,839 Speaker 2: I'm concerned about what the impact it will have on 118 00:06:43,320 --> 00:06:46,520 Speaker 2: Wellington ratepayers who are wanting to have a council which 119 00:06:46,560 --> 00:06:49,520 Speaker 2: is focused on making long term decisions and actually sticking 120 00:06:49,520 --> 00:06:52,440 Speaker 2: to them rather than constantly changing their minds. 121 00:06:53,640 --> 00:06:56,000 Speaker 1: Energy Minister Simon Brown, thank you very much for your time. 122 00:06:56,080 --> 00:06:56,839 Speaker 1: I appreciate it. 123 00:06:57,520 --> 00:07:00,680 Speaker 2: For more from Heather Duplissy Allen Drive and live to 124 00:07:00,800 --> 00:07:03,839 Speaker 2: news talks. It'd be from four pm weekdays, or follow 125 00:07:03,880 --> 00:07:05,640 Speaker 2: the podcast on iHeartRadio.