The other shoe drops

OK, so maybe Lyndon Hood was right after all: having stirred up fear over an impending power crisis, Transpower is now demanding amendments to the RMA and fast-track authority to ensure it can upgrade the grid in time - and threatening "US-style" blackouts if it doesn't get its way.

(That's an interesting turn of phrase, BTW, since the chief cause of the California blackouts was power companies gaming the system and artificially creating shortages to reap windfall profits - but I digress)

My initial reaction is one of anger. Transpower is an SOE; it exists to do a job. Rather than doing it, they've decided to sit on their arses and act as a shill for business. They need to be brought back into line. The Shareholding Minister should be calling board members into his office and asking them to explain why they've let this happen, why Transpower didn't ensure that the network was upgraded to meet rising demand (which they knew about, because they'd modelled it), and what steps they have personally taken to ensure that Transpower fulfilled its primary purpose of operating, maintaining and upgrading an efficient national grid. And then, he should fire some of them. Transpower has suffered a gross failure of management, and the board is ultimately responsible. They should pay for it.

Unfortunately, while that would be satisfying, it wouldn't fix the problem - because it is inherent in the SOE model itself. What we are seeing here is the effect both of market imperatives and of the corporatisation of what was once a public service. As long as Transpower makes its decisions based solely on the market, and as long as it thinks of itself essentially as a large corporation constituted to make profits for its owners, rather than as a vital piece of publicly-owned infrastructure, then we are going to have problems. The only way to fix them is to bring Transpower back under closer control of the state.

Look at the roads. Like the national grid, they're a vital piece of infrastructure on which people (and the economy) depend. Yet they're not run as an SOE. Instead we have centralised funding and planning to ensure that the network goes everywhere we want it to go and carries the traffic we need it to. It's not perfect - just look at Auckland - but the system generally works and is at least certain of its purpose: to build, maintain and upgrade the road net for the benefit of the people of New Zealand. This is how we should run the national grid - not as an SOE, but as a Crown Entity with a charter which lays out very clearly its purpose. This does not rule out making a profit - it should obviously charge power companies enough to recover its costs - but the chief concern should be running the infrastructure, not trying to maximise returns.