To my power company
CC to government
You have seen fit to increase the cost of electricity to my family when my former contract ended. This is a scurrilous abuse of the privilege you have been given as a supplier of electricity in New Zealand. Why do I say this. There are a number of reasons.
1. Much of the electricity that we use in New Zealand is generated by our extensive hydro-electric dams (57%). They were built sufficiently long ago that their capital costs should have been totally paid off. Now all the cost is for running and maintenance. The water you use belongs to the people of New Zealand.
2. Another large portion of our electricity is from geo-thermal (20%), meaning that a total of three quarters of our electricity is generated without having to purchase any fuel. Our first geothermal plant was commissioned 68 years ago so the capital costs of that plant should have been long since paid for. Another plant was commissioned 2 years ago. The thermal resources of New Zealand belong to the people of New Zealand.
3. We have been installing wind and solar power for some time now. Both are, by far, the least expensive way of generating power today. The wind over New Zealand belongs to the people of New Zealand and just as in the case of water and geothermal resources, you have been granted the privilege of being able to use them. Again, no fuel needed.
4. The electricity from wind and solar, including the amount that is sent to you from private dwellings, is generated closer to end users, reducing, or at least delaying the need for you to invest in high voltage power transmission lines. As wind and solar installations increase, private and commercial, this tendency will continue and increase.
5. As we, the people, install more and more solar panels and batteries, excess electricity is being sent to you at a discount, for you to sell at the full retail price. This costs you nothing in capital costs. We are bearing the investment costs and you reap part of the benefits. If you install your own mega batteries, you can purchase cheap and sell at a profit.
5. Up to the late 1980s, power generation and transmission was a government function. The whole system was built, financed by the people of New Zealand. Starting in the late 80's a misguided government agreed to privatization. Now you generate revenue which has to be shared with share-holders instead of it being passed back to the exchequer and hence to the people. I would have thought that this would impose on you and the other power generation and transmission companies a duty of care to give the best prices possible to Kiwis and not just think of your share holders. Virtually all the fuel you use (water wind and sunshine) are free. I think you have got the balance wrong.
6. With the electrification of our country in the form of, induction cook tops instead of gas, Heat pumps instead of burning fuel, and the uptake of EVs instead of ICE cars, your sales are steadily increasing. Your prospects for the future is a continuing of this trend, with some of the capital costs of generation being born by us as we install solar panels on our roves.
7. As you find the need for more generation you now have the option of wind, solar and mega batteries. These options are quick to install compared to hydro, geothermal, nuclear and pumped storage and all generate electricity with lower costs than any of the pre-renewable options.
At the core of the problem is the cockamamy system of pricing electricity. In the half hour bidding, if the first and major bidder gives a quote for each mWh of electricity they will supply, that is not what they receive. All bidders get the price of the most expensive bid. Giving all the bidders the rate of the last and most expensive bidder (often for gas generated electricity) is just dumb and makes a mockery of the bidding system. I have heard that there are some disadvantages of paying what was bid, but I am far from understanding why. This system must be reformed.
If you 'get with the program' and install wind, solar and mega batteries, there soon should be no need for a gas back up. Is this possibly a reason for dragging your feet on installing such equipment. With gas out of the picture, and even using the silly bidding system we now have, the highest price electricity will be what a mega battery can provide. Batteries will be the 'peaker plant'.
By the way, the Hornsdale experiment showed that besides the cost benefit, mega batteries stabilized the voltage and frequency of the grid. Electronic equipment, which we all have in ever increasing amounts in our houses do not respond well to spikes and drops in voltage.
Lets get on with the transition and stop charging us ever increasing costs for our electricity. Costs should be steadily decreasing in our present technical climate.
