A Tale Of Two Electricities

This post is about electricity and how the Government has taken a cavalier approach to it in the last 30 years or so in NZ. Firstly in electrical safety, and secondly in the provision of electricity at a cost that people can afford.

So let’s look at electrical safety. We can remember Consumer magazine reporting on the electrical safety standards that were expected to apply when they tested electrical appliances, and they often found faults with major devices like washing machines and dryers that they checked. From time to time faults would also be found with everyday things like lamps and sockets, where manufacturers had cut corners to save a few dollars in assembly, or parts were not engineered strongly enough (although we do have sympathy for PDL who had to re-engineer a 3 pin socket to deal with additional stresses caused by people pulling on extension or power cords as seems to be so commonly the case when vacuuming a house or commercial premises).

It was simply expected that electrical products would be constructed to a high standard and capable of lasting a long period of time under everyday use. That however has not been the case since the 1990s when a National government swept away all of our safety standards and replaced them with much more basic requirements under the guise of eliminating excessive barriers and regulations. This has led directly both to a range of products that can cause fires in everyday use, and to safety concerns over the design of certain types of appliance. For example, a bedside lamp can now have a metal body and shade that are not earthed, and have wires passing through them, that now meets the definition of “double insulated”, which would not have formerly been accepted. There is very little protection against the deterioration of the insulation on the electrical wires, which does in fact happen from time to time, especially if there is not enough protection provided to prevent wires from being cut through by sharp metal edges.

Another example is a heater made by a very well known European manufacturer that is basically an unearthed metal box. The so called “double insulation” is achieved by mounting the live electrical element on some plastic prongs that by themselves prevent it touching the cabinet – for as long as the cabinet remains completely straight and unbent, and as long as the support structure of the element itself also remains intact as designed. The electrical lugs attached to conducting wires must also remain anchored onto their terminals to ensure they do not come loose and touch the metal chassis. This would never have passed inspection 30 years ago in NZ but is now permitted in the name of shaving a dollar or two off the manufacturing cost – think just how tiny the expense would be of fitting a 3 core flex instead of 2, and bolting the earth wire to the chassis. We have used these heaters and in fact referred one to the Energy Safety Service, which proclaimed that it passed NZ safety standards. No doubt tens or hundreds of thousands of them are in operation in NZ and worldwide.

The biggest concern is over plugboxes and extension cords that simply cannot meet their rated design load. This is especially a challenge with the fact that practically all plugboxes on the market have an overload cutout that will trip at 10 amps, and yet they are probably failing at much less than this. With our experience of electrical testing, we saw more than a few plugboxes fail tests because the stupid watered down safety standards failed to ensure they were robustly made. The chief failing, which was seen in all sorts of brands, including those produced by a very large Australian company with a hitherto strong reputation for quality products, was the use of electrical contacts within the sockets made of metal only minimally springy, in fact that would be made of soft metal that would bend back and not return to original position, which meant that after a period of use, gaps would open up. This led to numbers of these devices failing an earth test because the earth pin contacts had bent away and were not reliable any more. This is also what causes these plugboxes to catch fire in households because the power carrying contacts bending away causes arcing which generates heat. The result now being we have to have fire safety warnings produced about plugboxes and extension cords, that they should only be used for light loads, people should not expect jugs and heaters to work reliably on them.

The second major electricity issue in NZ is over the supply of power to the marketplace, including domestic consumers. In the late 1990s, another National Government made a great proclamation about reforming the electricity market and making it work better. This was led by a former Treasury/IMF analyst and banker who had become a Cabinet Minister, and turned out to be the precursor to privatising the large state owned electricity generators. Only one full privatisation was completed prior to a change of government in 1999, but the selling of minority stakes by the Key government in the 2010s has created more pressure on these companies to maximise their income for the benefit of private shareholdings. The creation of a competitive electricity market has not gone far enough because “gentailers” who both generate and retail electricity have a stranglehold over a significant chunk of the market, and an example is that Meridian Energy which owns significant hydro power assets is being investigated by the Electricity Authority for allegedly deliberately spilling water over some of its dams that could have been used for generation, to keep the spot price of power high.

What we have to acknowledge is that the government itself as a significant owner of most of the larger gentailers (they have 51% stakes in Meridian, Genesis and Mercury) has a vested interest of its own in ensuring electricity income is maximised to feed the State coffers. When the Clark Labour government was in power in the 2000s they managed to completely shut down political debate over electricity prices at that time (there seems to be a political consensus that new policies brought in during that era have helped drive pricing increases in power, for example requiring cheaper fossil fuel generation to be replaced by expensive renewables). Electricity dividends were used by the Clark administration to fund unrelated expenditure such as major highway projects. Now that we have another Labour government in power, they are hiding behind their Electricity Authority to get their dirty work done as the issues raised in relation to Meridian’s behaviour have been raised by independent (non-generating) retailers for many years already. Labour is not really interested in admitting the government benefits significantly from the hidden taxation income from a lot of electricity generation in NZ.

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