Powershop Update

Just got an email from Alastair Thomson at Scoop informing me I'd won $1,000 of power at powershop.co.nz in the 'Powershop Pioneer' draw for April.

I never win anything....so this is a moment I'll savour for a good long time.

Powershop.co.nz

After reading Russell Brown's comments on Public Address in response to the NZ Herald's John Drinnan having a go at Brown (and David Farrar and Alistair Thompson) about links to Powershop, I signed up for powershop.co.nz. Apparently, it's backed by Meridian, who were my power provider anyway.

It took about 5 minutes online. Have your ICP number handy. That's easy to do if you have your power bills emailed to you. It's on any statement. Once completed, the swap was made in a few days and I got an email telling me it was all on and I was ready to go. I saw the email and didn't think about it for a couple of days.

Today, I went and logged in and found that I was an estimated 101 units in arrears. Ooops! OK, so I went out to the meter and did a reading and came back and entered the actual number. Now I was 177 units in arrears.

Better buy some power then.

The "Buy Power" page offered me a variety of "packages", (including a branded "Crusaders" rugby pack!) and the unit price of the power was below each package. (Click on the image to the right to see a larger version.) The cheapest option today appeared to be a "Flower Power Catch-up Pack", so I clicked on that. Then I read the fine print that appeared and realised this was a week's worth of power, but it expires day after tomorrow and I'd have to use it all....or lose whatever I didn't use. it. I deleted that item from the Checkout list and went back for another, more careful look.

The power packages appear to include the line charge, despite the price per unit being about the same (or a bit more) as it would be PLUS the line charge. On the face of it - first impressions - this appears to be cheaper. Perhaps that's the benefit of paying in advance for power....because that is what is happening here.

I'm not used to thinking of power pricing like that. With the expiry on the 30th of April, I stood to lose most of $89 had I rashly checked out. I did not.

A change of power culture between my ears is clearly required. I clicked on the back button.

Instead, I bought 600 units of Standard Power for about $134 and that will see us right (estimated) until mid-May. This power must be consumed by June 30th. No problems there. I used my Kiwibank Debit VISA to make the payment, so I paid cash, not by credit.

I was also offered "Power Packs" of various types. Reading the details, they appear to come from different power suppliers. "Flower Power", for example, is from "Powerkiwi". Or you can buy "Green Power" at about 1.3 cents more per unit and they will buy voluntary carbon credits at 0.18kg of carbon for each unit purchased, to offset the fossil fuels used to generate your power. This is a chance for would-be Greenies put their money where their principles are. Or you can buy Tree Power and they will plant trees, as well as provide electricity. I might go with the tree power while the government is still in denial about climate change and ignoring the Emissions Trading System. At least then I know something will actually be done.

Don't forget to scroll the power packages left and right so you see them all. It only displays 4 at a time. You might miss out.

Or if you want to play futures with your power, you can buy a "Winter Pack" now for future use. They come in bundles of 100 units and will be doled out at 25 units / month over 4 months, at the moment, May to August. That would be, in effect, 1 day per month, per bundle, purchased in advance. I can see how buying a few of these ahead of time would lower the amount you actually have to front up with in those months. Of course, the same affect could be achieved by over-paying your usual monthly bills on a more conventional power payment regime. But the lure here is that you actually save money.

There is some obscure mumbo-jumbo describing when packages are available for use:

"Units are valid between the last date prior to the relevant month that Powershop reviews your account and the first date after the relevant month that your account is reviewed."

I can guess what "last date prior to the relevant month that Powershop reviews your account" means, but it would only be a guess. Relevant with respect to what? Reviewed when? Last date prior to....what again? If I can't find a good explanation somewhere on the site, I'll send them a note via Feedback" asking them to explain and to consider providing more detail and perhaps and example or two. ("Felix" emailed me to say "reviewed" means when they read the meter. That just leaves one to wonder what "the last date prior to the relevant month" means. )

I have the feeling I'll have to pay careful attention to the dates and any other conditions. For the moment it seems novel and might even be fun. I'll give it a good serious go and document my experiences here.

Shifty energy games - not in my name, thanks.

Wednesday, the business section of the NZ Herald reported "Energy Minister Gerry Brownlee has said that improved productivity, rather than continual price rises, was expected from the generators". Today, the Herald informs us "The Government has summoned the heads of State-owned enterprises to an April 9 meeting, where they will be told to improve their performance."

The "E" word from the 90's - efficiency - re-emerged, too. Back then it was by-word for a governmental process that essentially crippled public enterprises in order to run them down and thus justify eventually sell them off.

"We are keen to talk to them to make sure they are contributing to the economy in an efficient way," State-Owned Enterprises Minister Simon Power told NZPA.

"In the six months to the end of December 2008 we have seen the net profit after tax across those portfolios reduce by 50 per cent.

"That is a matter that a shareholder of any commercial enterprise would be concerned to discuss."

What does he mean by "contribute to the economy in an efficient way"? Lower prices? How then can they earn higher returns? Lower costs? They are already under fire for old and / or inadequate infrastructure. Given Energy Minister Brownlee has said they shouldn't increase prices, it looks very much like National is setting the SOE boards an impossible set of conditions: increase profits - presumably by the 50% referred to - without increasing price.

The Herald reports Minister Power summoned the SOE heads to a meeting to discuss measures to improve their financial performance.

Labour's Charles Chauvel says, "This is code for SOEs charging higher prices to the public. ... There is fundamentally one way that energy SOEs can contribute higher dividends to the Government - by charging higher prices."

History says he is right. Power's reference to taxpayers having a $24 billion dollar investment in the power companies makes it clear he expects a commercial rate of return - no matter what the economic circumstances at the time may be. That rate of return could be - say - 10%. That would be annual profits on the order of $2.4 billion dollars. Maybe more. Maybe less.

In my opinion, National's setting up a Kangaroo Court for the SOE boards. If they do make the money he demands from them, he'll call them robbers and sack them for putting prices up. If they don't make the money, he'll sack them for non-performance. There's no way these organisations can meet these conflicting requirements and any one of these pretexts can be used to sack the boards. It would seem the Minister doesn't want them to succeed. No other conclusion fits the situation National is creating.

Once again National confirms for me they aren't a party I could ever vote for. Ideology aside, they way they operate is simply shifty. That makes them bad employees. Our employees.

Not in my name, thanks.

Ya gotta wonder......about cars.

John Key's new government and Cabinet is worthy of closer examination and I will get to it soon. I want to let that one settle a bit.

Today I am thinking about cars. Make that car makers. US car makers.

I remember, back in late 2003, I was standing in the paddock behind the house on a property we have since sold, thinking about cars.

My train of thought had run across and through the US invasion of Iraq and on to a falling US dollar. If past cycles held true, the Saudis and others would seek to compensate themselves for the decline in the currency their oil is valued in and oil prices would rise. Alongside this, the avalanche of war spending that would surely ensue in Iraq over a period of what could only be YEARS would see debt explode and interest rates rise leading to........a recession.

When? Unclear....but as certain to arrive as almost anything I could imagine. The signs would be there along the way.

In this context, cars came to mind. The last time the United States did this to itself, the Vietnam War era, the big US automakers made almost no provision for a possible future that involved selling smaller, more efficient cars. They suffered and the Japanese and European car makers began to eat their lunch.

Surely, this time around, mindful of past cycles, the legion of experts the major US automakers would have on tap would see to it that this contingency was covered. How could I, standing in a paddock in NZ, possibly have more insight into global economic trends than they could or would? Seemed bizarre to me that they would allow this particular process to engulf them.

I clearly recall concluding that they would. I was betting on the myopic stupidity of people I've never met and never will...based on my own knowledge and experience of US corporate culture.

Looks like I was right.

Whenever I think I'm right, I look for an alternative explanation. There is one, but it requires some faith in clever people working for US auto makers and if they really were that clever, they would be able to avoid the whole problem in the first place by being tooled up and ready to make smaller, more efficient cars....and would have been pushing for laws to push people in that direction in order to address climate change, energy independence, national security...or whatever.

It could be that running the US-based auto industry off the cliff is their way of breaking the powerful unions who ensure that US (and Canadian) auto workers have good wages and conditions. While times are good...No problem. When times get tough, the automakers let the shit hit the fan, take the inevitable bail-out....and bust the unions.

This alternative explanation accounts for all the facts BUT FOR the effect such a plan would have on the current crop of executives....who would almost certainly get the sack and have their reputations tarnished and possibly their business careers ended.

Whatever....there are some dumb people in big automaker offices in Detroit.

Oil and Isolation: Global public transit?

Maybe the governments of the world should look at global air traffic and see it more as a public transit system than as a collection of competing private carriers doing what is in their own best interest?

Bloomberg reports NZ is seeing rising tourism from Australia (17%) while overall visitor spending growth has slowed to 2.7%, about half the previous year. Based on the figures in the report, that is a loss to NZ of about $162 million, thanks to a higher price for aviation fuel. The government will have seen the tax take reduced by a proportion of that. Let's use the GST rate and call it $18 million, though it will be much higher when income tax from wages and profits in the tourist industry are also taken into account.

Maybe it would make sense to use $15 million (for example) to allocate a tax credit to fuel for any airline - foreign or domestic - flying to and from New Zealand? Treat it like a public transit subsidy to encourage ridership. In order to claim it, travel reductions would have to be measurable and in line with the cost reduction. The amount of fuel attracting the credit would be equal to the number of kilometres flown on the leg to / from NZ. We don't want fuel tankers arriving half-full at foreign ports with excess fuel funded by our tax credit.

Look at air links to and from New Zealand as key infrastructure upon which a large chunk of our economy ($6.16 billion from overseas) rests. It seems a terrible shame to allow ourselves to be isolated globally and also let a large chuck of our economy strangle when a relatively trifling sum would continue to make it affordable for more people to travel here and from here. Meanwhile, maybe the NZ government could look at alternative fuels for long range air craft. There could be money in that i the years ahead.

I'm not usually a fan of subsidies, but for a small country as isolated as we are, I don't think we should allow ourselves to confined to quarters and effectively placed off-limits to others by the rising price of oil. It's an isue we will face on every transport front. For the sake of $20 or $30 million worth of fuel costs we might lose $400 million or more in tourism from overseas. Social impact aside, that alone represents a net economic loss to New Zealand greater than the cost of the fuel.

Air links to and from New Zealand could, and perhaps should, be seen as loss leaders to attract visitors and allow more of us to remain an active part of the wider world. We would have no objections to other countries reciprocating in kind.

Like the printer model: sell the printers for cheap and make money on the consumables.

While we're at it, maybe we could look at building sailing ships with battery-backed motors charged by wind and/or wave power to carry cargo with zero carbon emissions. We may need those too in the years ahead.

Oil over US$144 / barrel amid Iran attack fears

You have to give George W Bush credit. The one thing this oil president has been wildly successful at is increasing the price of oil steadily and hugely.

Today, amid rising fears of an attack on Iran by Israel, the US or both, oil markets bid the price of light crude up to over $144 / barrel.

Iran's response to the rising threat can only be described as measured:

Iran’s oil minister warned today that an attack on his country would provoke a fierce response, but said Tehran would not cut oil deliveries and would continue supplying the market even if struck.

In New York, however, Iran’s foreign minister did not rule the possibility that Iran could try to restrict oil traffic in the strait if the country was attacked.

"In Iran we must defend our national security, our country and our revolutionary system and we will continue to do so," Foreign Minister Manouchehr Mottaki said in an interview with The Associated Press.

Mottaki said he does not believe Israel or the United States will attack, however, calling the prospect of another war in the Middle East "craziness."

"Craziness" is a good word for it. That may well be the term that historians and voters come to use when referring to George W Bush's two terms in office....and the fact that enough voters supported him to allow him to get close enough to winning to make cheating possible.

The US says it won't allow Iran to close the Straits of Hormuz. Let's hope the US isn't stupid enough to create the situation where they get to find out if they can.

The Bulb Hoarders

Like New Zealand, Australia, Ireland and the US, the UK is phasing out incandescent bulbs. But people being people, some cling to what they know, however (relatively) wasteful and expensive that may be.

Interesting that this article, like those in NZ media, is framed in negative terms despite all the manifest benefits for making this move. I wonder if Crosby / Textor is helping the UK Conservatives nationally as they helped in the recent London elections?

Palast on the Exxon Valdez Disgrace

The US Supreme Court has reduced Exxon's liability for the Alaskan oil spill 20 years ago by 90% - from US$5 billion to US$500 million. The reason given was that they did not profit by the spill.

Greg Palast details how Exxon profited for years by destroying evidence of small spills and illegally not maintaining both the means to prevent a spill and the capability to respond to any spill. Extracts:

...
In today's ruling, Supreme Court Justice David Souter wrote that Exxon's recklessness was ''profitless'' - so the company shouldn't have to pay punitive damages. Profitless, Mr. Souter? Exxon and its oil shipping partners saved billions - BILLIONS - by operating for sixteen years without the oil spill safety equipment they promised, in writing, under oath and by contract.
...
In 1971, Exxon and partners agreed to place the Natives' specific list of safeguards into federal law. These commitments to safety reassured enough Congressmen for the oil group to win, by one vote, the right to ship oil from Valdez.

The oil companies repeated their promises under oath to the US Congress.

The spill disaster was the result of Exxon and partners breaking every one of those promises - cynically, systematically, disastrously, in the fifteen years leading up to the spill.
...
Forget the drunken skipper fable. As to Captain Joe Hazelwood, he was below decks, sleeping off his bender. At the helm, the third mate would never have collided with Bligh Reef had he looked at his Raycas radar. But the radar was not turned on. In fact, the tanker's radar was left broken and disasbled for more than a year before the disaster, and Exxon management knew it. It was just too expensive to fix and operate.

For the Chugach, this discovery was poignantly ironic. On their list of safety demands in return for Valdez was "state-of-the-art" on-ship radar.
...
* Several smaller oil spills before the Exxon Valdez could have warned of a system breakdown. But a former Senior Lab Technician with Alyeska, Erlene Blake, told our investigators that management routinely ordered her to toss out test samples of water evidencing spilled oil. She was ordered to refill the test tubes with a bucket of clean sea water called, "The Miracle Barrel."

* In a secret meeting in April 1988, Alyeska Vice-President T.L. Polasek confidentially warned the oil group executives that, because Alyeska had never purchased promised safety equipment, it was simply "not possible" to contain an oil spill past the Valdez Narrows -- exactly where the Exxon Valdez ran aground 10 months later.

* The Natives demanded (and law requires) that the shippers maintain round- the-clock oil spill response teams. Alyeska hired the Natives, especiallly qualified by their generations-old knowledge of the Sound, for this emergency work. They trained to drop from helicopters into the water with special equipment to contain an oil slick at a moments notice. But in 1979, quietly, Alyeska fired them all. To deflect inquisitive state inspectors, the oil consortium created sham teams, listing names of oil terminal workers who had not the foggiest idea how to use spill equipment which, in any event, was missing, broken or existed only on paper.
...

One more example of corporate criminals getting away with serious crimes while the victims of their negligence and the consumers of their products end up paying for their mistakes.

High oil price reversing offshore outsourcing?

It seems high oil prices are making some outsourced manufacturing operations more expensive and causing what might be referred to as "reverse globalisation". ABC News in the US reports:

...
"Cheap labor in China doesn't help you when you gotta pay so much to bring the goods over," says economist Jeff Rubin.
...
"It's not just about labor costs anymore," says Rubin. "Distance costs money, and when you have to shift iron ore from Brazil to China and then ship it back to Pittsburgh, Pittsburgh is looking pretty good at 40 bucks an hour."
...

If this is the case for the US, it surely must have a role to play in either bringing jobs back to NZ or removing them entirely to locations nearer the markets being served.

NZ Herald nakedly anti-Labour

If the casual observer needed any more proof that Auckland's only daily newspaper is aggressively campaigning for a National party win at this year's elections, we got it over the past few days.

The latest example of the Herald turning a silk purse into a sow's earis the Herald has going out of its way, over several days, to portray the move by the government to phase out incandescent
lighting as anti-choice, anti-free market and coercive.

The move to CFLs and high-efficiency lights could save this country 20% of all power consumed. That is several large power plants we won't have to build. It's water that will stay in the hydro lakes to get us through the winter.

That is an enormous amount of power to save and one could be forgiven for thinking the government's decision is a HUGE piece of good news on the energy front. Plus we will collectively save over $500 million in charges for power not used.

But no. Instead of lauding the move as a long overdue, responsible one demonstrating profound common sense, the Herald bitches and moans about chandeliers and dimmer switches. The Herald's include quotes from clearly uninformed people who think all CFLs are all bright blue or they "aren't sure" what this will mean for their chandeliers or the 2am trip to the loo.

A predictable slew of letters appears from Remuera and St. Heliers championing the endangered dimmer switches and utterly disregarding the fact this country will save 20% of all power now used. Clearly not the sort of folk who provide much support for power saving campaigns in dry winters. Me first-ers and uninformed with it.

I've been using CFLs almost exclusively since 1998 when they were $20 each. The one in my loo is an 11w CFL bulb that provides more than ample light to navigate under any conditions. They are brighter than a string of in-ceiling spots that each cast a small circle of light on the floor directly below and little light anywhere else and use 10 times the amount of power - assuming you only have two of them. I've seen up to 7 in a big loo - 350w vs 11w!!! - and no brighter. There is no contest.

I don't like the "blue" (daylight) CFLs either and don't buy them. I buy the yellower ("warm white") version.

I've been looking to buy a house and have seen as many as 15 in-ceiling light pots in a single room at 50w each. That is 750 watts to (dimly!) light a space that can easily be fully lit by less than 100 watts or 5 x 20w CFLs.

Where overhead fitting weren't appropriate for CFLs, I replaced them with attractive ceiling or wall mounted fitting or standing floor lamps that do suit CFLs.

At the Warehouse, CFLs are as little as $2.99 each last time I bought any. It's hard to keep up with prices as you buy CFLs every few years. Almost every one of mine have lasted 5 years or more. When I shift house, I tend to take them with me.

The point here is the benefit to New Zealand of moving rapidly to CFLs far outweighs the disadvantages.

But the Herald clearly isn't about portraying anything this government does as good.

Contrast the light bulb coverage with the complete lack of coverage by the Herald of a huge story reported by The Standard this week: The numbers on the unemployment benefit (17,465) are the lowest since 1979.

It looks increasingly as though New Zealand needs to look critically at the level of concentration of ownership in New Zealand's print media.

I wouldn't care how the Herald chose to mislead and misinform Auckland and New Zealand if they weren't the only daily newspaper in town. But they are and I am increasingly seeing that as a problem that needs to be addressed.

Freedom of speech isn't much use if there is only one voice being heard. Theirs.

(Disclaimer: I don't even vote for Labour. I'm just disgusted by the naked, consistent and persistent political bias in Auckland's only daily newspaper. We deserve better.)

winterpower web site is now "powersavers"

The winterpower.co.nz web site set up by the generators and Transpower to tell us about the state of the power supply is now being re-directed to powersavers.co.nz.

The layout of the site has vastly improved with the focus now being on concisely providing easily understood and useful information about power saving tips, actual power savings around the country, and the state of the hydro lakes.

Well done.

Incandescent bulbs on way out

Looks like the end of next year is the beginning of the end for incandescent light bulbs. I first started using the long-life bulbs in 1999 when I spent over $200 replacing every bulb in our new house with the $14 each Philips variety from Pak n Save, as they cost back then. The upside was that I never bought another bulb for that house in the 4 years that followed and I saved about 15% on the power bill during that time. I also didn't have to get the step ladder out every few weeks to replace blown bulbs, which I thought was a huge benefit.

The prices of long life bulbs in NZ have down considerably since then. I've paid as little as $2.99 each for the hose branded long-life bulbs at the Warehouse a couple of years ago. You do find yourself talking prices in intervals of years as you buy a new bulb rarely once you've populated all your fittings with the long-life version.

I was amazed when in Canada last year that Ontarians have to pay - after converting the currency - roughly 3 times as much as Kiwis do for long-life bulbs. But their power from the Ontario public power monopoly is much cheaper than ours, so they do not save as much by using them, so there has been less demand for them. My brother's 5-bedroom house will be electrically heated and lit all (COLD!) winter,every room, day and night, for a lot less than C$200 / month. The same in NZ would, today, cost 3 or 4 times that in nominal terms.

Dumb time to cut fuel taxes

If we are seeing the effects of peak oil, then it makes NO sense to cut taxes on fuel. Instead, we all should begin adapting to the post-oil world as soon as possible rather than pillaging the community coffers so those who have'em can drive their SUVs and V8s for a few more months or a year or two. The drop in the dollar will make it even more important to reduce fuel consumption.

Market lovers should be over the Moon about the recent glut of price signals to fuel users suggesting they should either reduce fuel consumption or be prepared to pay more for it. A lot more.

The taxes on fuel have been there since forever. They aren't new or recent. The money mostly goes to pay for worthy things most of us would prefer not to do without. Some if it even goes to build and maintain roads. Not we that will be need to do much more large sale road building.

Fuel taxes are also a tax no one has to pay directly if they structure their life right. So do it. The less fuel you use, the less tax you pay.

Makes sense to me.

Whenever oil was due to become scarce, we were always going to hear the howls of pain from the hedgehogs on the highway of life as their household budgets were squashed by forces they have chosen to ignore - in most case - all their lives. They could have pressured their elected representatives years ago to improve public transport. But they didn't.

OK...now maybe it's time to start.

It seems to be the time when demand exceeds supply. If you were paying attention, you knew it was coming, if not when. Did you prepare? It's not too late, though it soon will be if nothing is done.

Lets get those electric trains built as soon as possible. Let's get a good public transit system up and running in our major cities - and between them, with convenient, enclosed interchanges and reasonable fares that allow easy travel across - and between - our cities and towns.

Pay that tax money today and lobby government HARD (whoever it is) to ensure the infrastructure is there soon for the time when the oil isn't there in adequate quantities. The sooner we start, the easier and better it will be for everyone.

Let's not let short-term thinking yet again blight the future, as we have so often done before when the people who don't want to know and don't care impose their short-term ultimately futile thinking on everyone, including those who have been paying attention and trying to warn them what was coming. That would leave everyone down the track with no solutions where an "I told you so" doesn't help anyone.

It was and is possible to find opportunity amid the changes. Thirty years ago, the Danish government funded research into wind power generation. Now, the Danes lead the world in wind power technology. Why wasn't that New Zealand?

If we want to get off the oil teat as soon as possible, it might even make sense to increase fuel taxes so we can get the job of building public transport infrastructure done faster. When the going gets tough, the tough get going....and the whiners get a kick up the arse for having not paid attention (again).

Somehow we have to get past the "last tree" problem. What's that? Well, imagine you're on an island and the population grows to the point where the number of remaining trees for building houses and lighting fires and making canoes for fishing has fallen to the level where - unless consumption is reduced drastically - there will come a day where everyone will be fighting to cut down the LAST tree so they can live as they have always lived for just a few more days......and then it's all over.

"How could they be so stupid as to lets things get to that stage?"

Exactly. How could they.

They did it one day at a time. Just as we all are.

Double your tax cuts

The TV3 "Campbell Live" (June 4th) clip below highlights the decline of the big car as an attractive mode of conveyance for many people. Small cars are selling at a premium while big cars attract less interest or languish unwanted on auction floors. One comment in the piece is that the difference in the fuel bill between a big car and a small car may be $500 to $800 per year, while selling your petrol hog may crystalise a loss of many thousands of dollars. That sounds like a car salesman trying to have a bob each way, but let's use those numbers.

That logic appears to offer the worst of all worlds. By keeping the bog car, you keep your notional thousands that you will never actually realise while paying out between $10 and $16 more each week on fuel per big car. Many families operate more than one vehicle with if there are two adults working.

I'd rather have the cash-in-hand weekly savings now, thanks, than the imaginary dollars on wheels. If your fuel savings were to be in the upper range quoted (and some people may save even more), then you've effectively given yourself a "tax cut" right now in addition to the $16 / week we'll get in October via tax cuts.

If you're a two car family, you could be looking at $30 / week or more in savings to the household budget. That easily pays for your monthly SKY subs and lattes for two a couple of times a week.

Thinking further, I suppose some people may be stuck with the big car if they borrowed money to buy it and would be left with negative equity if they sold it. Not a nice position to be in, locked into paying interest on a rapidly depreciating a set that is costing more every day to run due to higher fuel costs. These are often the folks who would benefit the most from unloading the fuel guzzlers.

Market model not working for electricity

I've been saying for years that the electricity reforms created a market with every incentive to NOT build new generation. I made reference to this myself just last Thursday.

I don't agree with Bryan Leyland about climate change, but this story in the Sunday Star Times (June 8th) suggests we share a common view of New Zealand's electricity market. He says Kiwis have paid $7 billion too much for power since the electricity reforms were introduced. His summary below is almost word for word akin to my own thoughts on the matter:

"Among the failures of the present market is the absence of any incentive to build spare capacity. That's why we're where we are today."

It can only be true or there would be no problem after the close brush with power outages in 1992.

Closed for maintenance

In the news today:

New Zealand's second largest thermal power plant is closed for repairs amid fears of a looming winter electricity shortage.

Contact Energy's Otahuhu B thermal power station was shut on Wednesday for what is expected to be four days because of a faulty boiler tube.

The closure of the plant will place more pressure on already dwindling South Island reserves.

Forgive me. I read the true story of how Enron and others manipulated power supplies in southern California a few years ago. This inflated the price of power and delivered more profits. Among the tricks employed, plants being taken offline for repairs was a biggie.

The effect: Power shortages - real or imagined. This was no conspiracy theory. It's what they actually did.

So allow me a moment's speculation.

Here we have the only private generator, Contact, taking a very large generator offline for repairs for several days, perhaps helping ensure a very profitable shortage later in the winter and a spike in prices right now.

I know stuff needs to be fixed if it breaks. How long it stays broken and whether the whole plant needed to go offline are the sorts of things only insiders can know.
With wholesale prices already much higher than normal, choking supply can only have one effect: higher prices.

Ooops.

This will bear further watching.

When it comes to corporates and ethically dubious strategies to maximise profits, the record is now very clear: You're crazy if you're NOT paranoid.

Energy: Thinking outside the square

Here's a business opportunity for a government or private company with an eye to the future of energy in New Zealand.

Implement a buy-now, pay later approach to home and business installations of passive solar water heating systems. This could be done by any of lines companies, generators, government or local councils or all combined. It would also represent a new revenue stream via providing contractually required on-going maintenance contracts.

Advantages

Security of supply would be greatly enhanced. The country starts saving power (coal, diesel, hydro lake water) from the first install. The hydro lakes begin the Winter less depleted and the risk of power problems ovr winter would be reduced or eliminated.

Power consumers will see lower power bills over time.

Civil defence capability is enhanced as water in homes can be heated to some extent daily during daytime power outages or if natural disasters cut off mains power.

Large scale power generation projects could be deferred. They wouldn't be necessary.

People currently on gas water heating are provided with a migration path away from that declining resource.

There would be a new and permanent monthly revenue stream from servicing and maintaining the large number of installations. Hundreds of thousands of homes and businesses paying some amount every month.

A new industry employing thousands of people would be created and would have a long term, local future.

Reduces the incentive (and the ability) to keep power in short supply in order to maximise profit.

Disadvantages

Power conservation means lower revenues for generators. They have no financial incentive to reduce power consumption or to make power cheaper. The ONLY financial incentive for generators is to produce slightly less power than is actually required in order to maintain price and maximise profits.

Obvious Problems

Companies focused on maximising profit won't find this attractive. It may fall to government to somehow enable this in the national interest. No one is going to lose money. The problem is they stand to earn less.

In order to avoid people shirking their obligation to pay, over time, for the installation of the systems, the cost of the installation could be attached to the dwelling or structure itself instead of being the personal property of the persons or company currently occupying the structure. Ideally, this would involve local councils as they already operate to this model. Lines companies could do it to, as they can track power features by address as well as by person.

Either way, if you buy or sell a building, the liability for any remaining passive solar install debt and ongoing maintenance charges goes with it. You buy the house on the understanding that you may be paying $20 or whatever / month to pay off the install cost over whatever number of years and some additional amount for the service contract. The amount being paid could be capped at an amount equivalent to the power being saved.

Bottom Line

Had such a program been started in 1992, after the first major power scare, every home and business in the country could have already been upgraded this way. These installations would/could have saved a huge amount of power already. Far more power than several Project Aquas would have generated after the decade it would have taken to build it.

From a commercial perspective, they would now have all been paid off and generating ongoing service contract revenue for the providers/maintainers of the systems. Every new home would be required to have one installed - funded on the same model in order to lower the cost impact on new homes.

The benefits are many and obvious. The downsides are few....and none, if you aren't worried about generators earning less profit in a relative sense, while still earning huge profits in nominal dollar terms.

Still no rain down South

The hydro lakes are getting lower and lower.

Bolivia, energy and sovereignty

Bolivia has nationalised yet another element of its energy industry. The Bolivian government already owned 50% of this and other enterprises and sought to buy back the remainder. When agreement could not be reached on a share buy back, they simply took it.

The dilemma faced by Bolivian President, Evo Morales, is a common one in poorer nations. His country faces the same pressures faced everywhere of rising prices for many ordinary items. The profits from the energy industry are increasing and a lot of that money has been flowing out of Bolivia. Bolivia need not actually be poor at all, as it has significant energy reserves.

The privatisations of infrastructure made by the previous government were widely rejected. The World Bank had demanded Bolivia privatise infrastructure, which lead to the price of water increasing by 200% and 300% for many people. Others were charged for using water from their own wells. This prompted a revolt with riots spreading through out the country. The water privatisations were reversed. They had made things much worse for ordinary people forced to pay monopoly rents to foreign-owned water companies.

There will always be a tension between private property rights and the national interest. This tension is particularly acute in poor countries or countries where wealth (and consequent well being) is not equitably distributed. As energy issues move to the fore, I think we can expect to see more such moves by countries tired of exporting a huge chunk of the value in their resources via multi-nationals.

President Morales seems to be applying the same simple logic to his country's energy industry. He wants and needs more revenue to support the programs his government wants to put in place to help the poor of Bolivia. He is following the lead of Venezuelan President, Hugo Chavez, who has also made efforts to use his countries resource wealth to improve the circumstances of the majority who had been left out of the loop in previous decades.

The question now is how will the multi-nationals react? In the past, they have usually lobbied the US government to intervene and leaders like Morales have found themselves either dead, deposed or facing a "rebel insurgency" funded by the CIA with particular focus on blowing up or disrupting whatever is the multi-nationals wanted to control. It's a form of extortion racket. Iran, Honduras and Chile are three well documented examples. Venezuela has also been the target for US-backed coup attempt (and here) in April 2002, lead by oil executives.

Well aware of these attitudes from the gringos to the north, President Morales explained his nationalisation strategy thus:

President Morales said Ashmore had agreed to sell some of its 25% share in the firm but that these talks had not led to a deal.

"We waited patiently all month, but the actions they took were totally different," the president said.

"They wanted to be bosses, and have us be the employees. We're a small country - sometimes they call us underdeveloped - but we have lots of dignity Partners are welcome, but we will not accept bosses."

www.winterpower.co.nz

Transpower has set up a web site to inform us all about the state of the power supply during the Winter. It's "winterpower.co.nz"

Winter Power Watch is about providing all New Zealanders with accurate, up to date information about the outlook for electricity supplies during winter 2008.

We're heading into winter this year off the back of a significant summer drought in the North Island and low rainfall in the South Island. At the same time, the electricity industry has been dealing with numerous technical issues such as the forced retirement of New Plymouth power station (because of asbestos contamination) and limited transfer of energy across the HVDC link between the islands.

...etc..

Well worth a look. I found on homepaddock's blog. It had been cited by Bernard Hickey as an example of government waste.

I don't agree. I found it very useful. My requirements wouldn't be the same as Mr. Hickey's, I guess. Probably a case of one person's waste being another person's excellent value.