Pioneer energy CEO Fraser Jonker would like the Government to review the mandate of the Electricity Authority (EA).
From April 1, 2018 the authority is implementing changes that will negatively impact Pioneer Energy’s profitability (by approximately $3m annually) and will have a flow-on effect to the dividend paid by the company to the Central Lakes Trust.
“A second proposal that would have been catastrophic for our business has been parked for interim…. to be revisited at a later time,” he said.
“The Electricity Authority has a narrow mandate around the efficiency of the grid,” Mr Jonker said.
“It has no mandate for social welfare, the environment or regional development. They believe they are doing the right thing, but people in Central Otago have no say in what is happening to them.”
By effecting the potential development of Pioneer Energy and reducing its divided to the Central Otago Trust there will be a negative impact on regional development in the district, he said.
“My hope for the future is that politicians will reconsider the Electricity Authority’s mandate, as it is too narrow.
“We are fighting the authority, but they are doing what they are mandated to do.”
The changes will put just a few dollars in consumers pockets but will effect the collective power of that amount as a dividend to the community trust, he said.
When Pioneer was established the community decided to ensure that the ownership was kept as a community asset “instead of getting a few dollars for a new fridge.”
“The 1999 decision has been almost been undone. It has gone the full circle.” he said.
“We will survive as a business but our financial position will be seriously impacted by this. Our ability to grow and invest will be impacted.”
Pioneer Energy has reduced over heads and re-shaped the business at a cost of approximately 12 jobs nationwide as it prepared for the changes.
“Support from the community during last year’s campaign [against the changes] was absolutely amazing. It makes for a strong business having the community around us,” he said.
The Minister of Energy and Resources, Judith Collins, said she was not considering expanding the Electricity Authority’s mandate.
“The EA’s predecessor, the Electricity Commission (pre-2010), did have have to consider broader objectives and could be directed by ministers, both of which [factors] were seen to slow its ability to make improvements to the market. The EA’s functions were narrowed and it was set up as an independent crown entity to improve the quality of timeliness of its regulatory decisions.
“While decisions made by the EA may not please everyone, they must be consistent with its purpose, which is to promote competition, reliable supply and the efficient operation of the electricity industry for the long-term benefit of consumers,” she said.