Months of discussions, arguments, lobbying and presentations have come to nothing following the abandonment yesterday of a controversial electricity transmission pricing model.
The issue about how much consumers should pay to have their electricity supplied to them from mainly South Island hydro plants has dragged on for a long time, dividing the North and South Island branches of BusinessNZ.
The Otago-Southland Employers Association argued vehemently for lowering charges in the South, from where a lot of New Zealand's renewable energy is generated. Consumers living close to the Waitaki and Clutha catchments, particularly businesses, should receive the benefits of being within sight of the electricity generator. Knowing the power was being transmitted over their heads, and being subsidised by them at the same time, was not a preferable option.
But in Northland, the argument was completely different. Far North Mayor John Carter, himself a former National MP, and New Zealand First leader and Northland MP Winston Peters, wanted the benefits of lower transmission prices to save their ailing district.
The EMA, the northern counterpart to the Otago-Southland Employers Association, submitted to Parliament and ran an aggressive campaign to get its point across of wanting lower power prices in the North at the expense of the South.
The argument is about putting costs where they lie - and not everyone is happy.
It is worth noting the final rules were not even going to be in place before 2020. The issue has obviously become political and the Electricity Authority made an early call to stop the debate in its tracks. It appears the pricing model was cancelled after the authority found a range of serious computational errors in the work by Australian consultancy Oakley Greenwood. The authority is considering ways to recover its cost.
The argument from the South included the aim of attracting industry to the region through lower power prices because of nearby generation.
About $1.3 billion had been invested in the grid in the upper North Island but only 39% of the investment is being paid for by the upper North. In the last 13 years, transmission costs have increased by 61% in the lower North Island and the South Island to cover the costs.
The status quo is not a fair system of allocating costs. Some parts of New Zealand enjoy the benefits of an upgraded transmission grid at the expense of other parts. No-one wants to pay more but subsidising particular regions is not helping their competitiveness.
Electricity is one of the most fraught pieces of legislation ever introduced in New Zealand. A former National energy minister Max Bradford reformed the sector, believing electricity prices would drop because of competition. The reforms meant some local authorities, which were generating, transmitting and selling electricity, had to sell off one of their assets as they could only carry out two functions.
Successive governments have tinkered around the edges of the reforms and, at the last election, Labour and the Greens wanted a return to a single electricity-buying authority to help regulate prices.
Mr Peters now claims it is his party which has forced the Electricity Authority's backdown. However, the truth is much more difficult to define.
It may be true the decision announced yesterday will save consumers and businesses in Northland alone about $10.6 million this year. But the converse is true. Other areas, like Otago and Southland, will bear that cost.
The authority continues to be determined to change the way transmission pricing is allocated, saying the current methodology encourages transmission customers to make wasteful investments merely to shift costs on to others. The activity results in higher prices for consumers unable to adjust their electricity demand.
Competition in the electricity sector is not truly alive and well, despite the best efforts of the Government when it sold off up to 49% of the major generating companies in New Zealand.
Now, there will be a much longer delay while politicians debate the fairness or otherwise of subsidised power prices for some regions.
