Power cut blame: Government should have answers in October

Tuesday, 17 August 2021

Energy Minister Megan Woods says investigation should take six to 10 weeks.

The Government should have answers over who or what was to blame for last Monday’s power cuts some time in October.

Energy Minister Megan Woods has released the terms of an investigation that will be conducted by the Ministry of Business, Innovation and Employment into the outages, which saw about 34,350 homes cut off from electricity without warning, during a cold snap that swept the country.

Woods said she wanted to know why there was not enough generation to meet demand and would be asking for recommendations to avoid a repeat.

“The investigation will look into how pending power interruptions are communicated to consumers, industry, stakeholders and whether the notices issued to market participants can be improved,” she said.

* Electric Kiwi files 'UTS' complaint over Monday's electricity market failure

* Heat goes on Transpower after Wel Networks reveals grid operator made huge error

The first report into the power cuts should be issued by the Electricity Authority and will focus on Transpower’s role.

“In addition, the investigation will also look at the availability of generation, demand forecasts, security margins and whether existing arrangements deliver appropriate security and reliability.”

The investigation will be conducted by former Labour Party minister Pete Hodgson, who now chairs Callaghan Innovation, with economist Erik Westergaard providing technical advice.

The Electricity Authority and Transpower have announced their own investigations into the power cuts, which could feed into the ministry’s study, and the Electricity Authority may need to conduct another as electricity retailer Electric Kiwi has filed a complaint under a separate complaints procedure.

The Electricity Authority has split its own investigation into two stages and intends to report back by the end of the month on Transpower’s role in handling the power emergency.

Transpower has admitted making a miscalculation that resulted in it instructing some lines companies to cut more power than they needed to.

Hamilton-based lines companies Wel Networks has said the mistake resulted in it cutting off power to 17,752 homes when it only needed to cut off 1373.

Electric Kiwi has queried whether Genesis and Contact Energy contributed by not having all of their thermal generation switched on.

The power cuts came at a sensitive time for the electricity sector, with calls growing for a fundamental reform of the industry after a period of soaring wholesale prices, rising carbon emissions, and an exodus of independent retailers which have expressed a loss of confidence in the market.

Vince Hawksworth, chief executive of majority state-owned gentailer Mercury Energy, told analysts on a conference call on Tuesday that it was important not to “conflate” the issues that led to the power cuts with other matters.

He described Monday’s power cuts as an “incredibly rare event” and suggested communication issues would emerge as one of the factors when the investigation got under the hood.

Transpower first warned early on the Monday morning that power supplies were likely to be tight that evening, but it was not until 1.02pm that it instructed power companies to increase their energy offers into the market, and it did not issue an ‘emergency notice’ until 5.10pm.

Genesis chief executive Marc England has said a crisis could have been averted if an appeal for more generation had been made earlier.