The Authority released their consultation paper titled "Implications of evolving technologies for pricing of distribution services".
This report smacks of industry protectionism for the current electricity model and their old ways of doing things from new technology rather than objectively looking for the advantages and benefits for all consumers. The paper which provides a 3 month submission window, suggests the distribution industry change their pricing model - to effectively charge all consumers a higher fixed rate - irrespective of whether you have solar or not. The analysis document is fraught with inaccuracies and written to support electricity distributiors and to reduce the competition from solar PV by changing the structure of distribution charges and making all consumers pay higher rates. They claim to support new evolving technology like solar, storage and smart energy management applications - but just not right now.
They suggest there is an uneven playing field in NZ with non-solar consumers subsidising those who install solar through unfair distribution charges, as solar prosumers dont pay there share of distribution charges. Suggesting this is a subsidy and incentive for solar prosumers is a red herring.
It suggests that this needs to be altered to reflect pricing based on peak demand. It also states that according to their research, there could be between $2.7 to $5 billion spent on solar over the forthcoming years and it is a wasted investment. This implies that the 7200 consumers that have invested in solar already (and still maintain a connection to the grid) have already wasted funds. Has anyone asked those 7000 consumers if they think they have wasted their investment?
SEANZ through the media has pointed out inaccuracies raised by EA:
First things first and heres the elephants in the room:
Why are ALL consumers paying for over investment in poles and wires when consumer-led alternative technologies are growing exponentially here now. The failure is in the historicial design of the NZ electricity market - but their solution is "lets slow this thing down by trying to make economic justification of solar investment over time more difficult for consumers".
It is the role of new energy technologies to drive change to existing models to place downward pressure on the current electricity pricing regime to decrease prices for all consumers as opposed to supporting an existing old model which is what is being advocated. The EA need to get on with it and regulate in a maner that does not limit choice for consumers but enhances it.
If EA are so concerned about one group subsidizing or incentivising another, why dont they consider actions like rationalisation of services across 29 lines companies. Or the business concept of "de-coupling" which allows a regulated business to protect its financial health from its regulated return base.
A free market is about consumer choice. Since when did EA have a mandate to advise consumers what they should and should not do with their own funds? Especially when it is based on inaccurate information and assumptions, and given solar and self generation of electricity is about an individuals right to energy independence.
They claim solar costs ~20c kWh versus other renewable sources at 8c kWh! Show us a consumer that pays 8c kWh for their electricity at the meter! They conveniently forget to add in the cost of transmission and distribution as consumers pay between 23c to 38c kWh dependent on where you reside in NZ - not 8c. Because solar does not require transmission and distribution the cost is less than buying power off the grid. This is yesterdays thinking.
It is like asking for the price of a new car outside the factory gate, ignoring the wholesale and retail margins to cover their costs, (includes transport and distribution) to sell and promote the car and have the car delivered to the consumer.
SEANZ is meeting the EA to address this and their consultation, there will be alot more to follow as we cover their spin so watch this space...
