‘Roadkill’: Shane Jones’ warning to Electricity Authority if high energy prices not addressed

Regional Development Minister Shane Jones is sending a clear warning to the Electricity Authority management. Photo / Mark Mitchell

• Regional Development Minister Shane Jones warns the Electricity Authority to use its powers or risk becoming “roadkill”.
• Energy prices are soaring, causing businesses like Winstone Pulp International to close mills.
• Energy Minister Simeon Brown wants market competitiveness and expects energy profits to be reinvested in generation.

The Electricity Authority will “end up as roadkill” if it doesn’t use its legislated powers to rein in the profits of energy generation companies, Regional Development Minister Shane Jones warns.

However, Energy Minister Simeon Brown is taking a softer tone, downplaying suggestions the Government is considering scrapping the authority and says he wants to see the market operate more competitively.

The comments come as energy prices soar amid record-low hydro-lake levels and gas supply constraints, causing pain for businesses including two timber mills in the central North Island which are closing permanently as a result.

New data from the authority showed the big six energy companies had made more than $70 million in margins, RNZ reported.

In the House today, Jones cited data that found for every $4 paid out in dividends by the companies, only $1 was invested in generative capacity.

He believed that proved the gentailers were favouring profit over the needs of Kiwis.

Energy Minister Simeon Brown is taking a different tone from his ministerial colleague. Photo / Alex Burton

Jones earlier told reporters he had met with authority management, an interaction he described as an “exchange of views”.

“They gave me some factual information. I said, ‘This is not a time for a pedestrian approach’, and I really want them to man up and use their authority, or they’ll end up as roadkill.”

He demanded “instant results” to moderate the gentailers’ behaviour.

Asked what could be done, Jones deferred to Brown, saying he didn’t want to “rain on his parade” and signalled measures would be announced in the coming weeks.

“There is no point maintaining an electrical authority, which is a key regulator, if it’s unwilling to flex its muscle or use the full powers in the legislation,” Jones said.

“If they don’t then they’ll find they’ll be something akin to roadkill because we’re not going to tolerate Kiwis going broke, while a tiny cast of New Zealanders who have the privilege of owning shares and leading corporate New Zealand profit.”

Winstone Pulp International (WPI) announced yesterday it would shut down Karioi Pulpmill and Tangiwai Sawmill because of crippling electricity prices.

WPI was the largest employer in the Ruapehu district. About 230 jobs are on the line.

Ruapehu mayor Weston Kirton had expressed concern about how local communities would be impacted, given other export manufacturers were facing similar decisions.

Brown and Prime Minister Christopher Luxon had so far shied away from accusing the companies of profiteering, instead calling for reassurances price-gouging wasn’t occurring.

Brown today restated this and said he expected profits to be reinvested in energy generation. He criticised the previous Labour Government for not prioritising energy security.

Asked whether the Government was considering shutting the authority down, Brown said he’d taken advice on a “number of options”.

Asked if shutting it down was an option, Brown said: “No ... What we’re saying here is we want to make sure the market is operating competitively, but we need more generation.”

Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.