Reforms seen as threat

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Proposed electricity reforms could threaten the existence of many Central Otago power stations and consumers need to get vocal to stop possible damage to the region’s economy, Pioneer Generation chief executive Fraser Jonker says.
The Electricity Authority reforms proposed the removal of a rebate currently paid to smaller power stations, and would also charge a new fee to send power generated in Central Otago and the Queenstown Lakes district around the local line network, Mr Jonker said.
He said the changes would make generation of electricity unprofitable for most of Pioneer Energy’s power stations, including all of its 12 generation plants in the southern district. This included hydro stations such as those at the Roaring Meg, Glenorchy and Wye Creek, and the Mt Stuart wind farm, which could all become unviable and be threatened with closure, Mr Jonker said.
As well as threatening jobs, this would affect a significant stream of funding for the Central Lakes Trust (CLT), Mr Jonker said. Pioneer Energy is 100% owned by the CLT and pays the CLT an annual dividend of about $5 million, providing total dividends of more than $58 million to the CLT over about 11 years.
Mr Jonker is now urging residents to attend a public meeting about the issue in Cromwell on September 23 and to voice their concerns to their local MP.
He said the proposals did not make sense. The rebate was initially brought in by the Government to reduce the buying in of electricity from other areas, and if less electricity was produced locally then more would need to be imported at higher prices.
‘‘These changes are hurting the heart of New Zealand . . . The proposed changes are a great example of people who’ve spent time at their desks playing with spreadsheets and have never bothered to leave their desks and visit New Zealand’s regions.’’
Pioneer Energy has made a submission opposing the changes and Mr Jonker has met with the Minister of Energy and Resources, Simon Bridges. Mr Bridges then invited Mr Jonker to meet with him again later to discuss his concerns, but when Mr Jonker subsequently made contact, Mr Bridges withdrew the invitation, and said he would not meet with him, Mr Jonker said.
The News emailed a series of questions to Mr Bridges and he replied with a two-sentence statement that did not answer questions about why he was not willing to meet with Mr Jonker again.
The statement said: ‘‘The Electricity Authority — who are an independent regulator — has recently finished their consultation on a revised transmission pricing methodology and on distributed generation pricing principles. The Authority’s final proposal will be informed by feedback from stakeholders. No final decisions have been made.’’
Electricity Authority chief executive Carl Hansen said the current rules — known as distributed generation pricing principles (DGPP) — meant distributed generators [small generators] were paid if they avoided transmission charges for some consumers, even if they did not benefit consumers overall by reducing the total costs of transmission. Consumers’ electricity bills were more expensive because of DGPPs, and the new rules would mean a drop in electricity bills in many areas.
Mr Hansen gave no timeframe for the next stage of the proposed reforms, and said submissions were being considered at present. – A public meeting about the proposed reforms will be held at 11am on September 23 at the Cromwell and Districts Presbyterian Church. From 12.45pm buses will depart for a viewing of the Roaring Meg Power Station. Seats are limited and must be registered at contact@iega.org.nz