Kerre Woodham: It won't be that simple to solve the electricity crisis

Kerre Woodham Mornings Podcast

It won't be a particularly good morning for the people of the central North Island. There was a sense of inevitability really, though, with the announcement that Winstone International will be closing its two mills near Ohakune. For months now, Winstone have been working on trying to find a way to keep the mills open in the face of declining commodity prices and astronomically high power prices. More than 200 workers are directly affected, but of course many, many more will feel the ripple effects of the mills closure. And this comes right on the heels of Ruapehu Alpine lifts troubles as well. It's a real double whammy for the region. The Tangiwai Sawmill and the Karioi Pulpmill have been a part of the central North Island community for more than 40 years. Generations have worked at the mills, but no more.

Resources Minister Shane Jones was with Mike Hosking this morning on the Mike Hosking Breakfast and says the reason for the closure can be laid squarely at the feet of the electricity authority, and we need to make changes to the energy sector.

“Look, it's up to you and I, as Kiwis and your listeners, do you want an economy where the price of power is internationally competitive to keep businesses functioning? Or do you want to disembowel your economy and turn it into an import model? I don't want that. Which is why Simeon Brown and I are signing off now the criteria and that criteria for the review of the power sector will involve structural separation, but look, mate, people have their had this nervousness, they've had this skittishness - don't touch the power system. We trusted the power system to deliver outcomes that boost international competitiveness and national security, they haven't so we have to change it, simple.”

Well, it's not going to be that simple, is it? Changing it is not going to be that simple at all. I'd be really interested to hear from other manufacturers or those involved in manufacturing and in business. Is it the fluctuating power prices? Can you point to the electricity authority if your business is really struggling and saying you, you as an entity are the reason that I may well go to the wall? There have been so many stresses put on business, put on manufacturers in particular, over the past four or five years.

Is the fluctuating price of electricity the straw that's breaking many camel's backs, or is it just four or five years of really tough times? Is it international prices making you uncompetitive when compared with product from the rest of the world and the electricity authority is being used as the whipping boy? I love the way he says simple, he’s going to break up the electricity authority. Well no, it’s not going to be simple. And it's too late for Ohakune, far too late. When Shane Jones says it's the electricity market that's going to stuff our economy, I would have thought there was a bit more to it than that. For people having to pay high interest on business loans, the cost of living crisis, which means spending is reduced internationally competitive prices, other countries being able to outbid you, the high wages that you have to pay here compared to other countries, really the electricity component, I would have thought is just another big pressing, weighty issue coming into your office, not the only one.

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