Will the exit of the smelter mean cheaper electricity? It should, because the surplus electricity will make wholesale prices crash. But power companies are turning that into profit. When Meridian manipulated wholesale prices last year for just one month, it cost consumers $80 million.

Most of the smelter’s surplus power will spill to waste, as happened when Meridian’s manipulation of wholesale prices led to extra coal-fired generation, which caused 6000 tonnes extra CO2 emissions.

But spilled water from the Manapouri power station is not wasted – it would go down the lower Waiau River, where it would begin to restore the now desperately depleted habitat for fish and invertebrates.

Industries are lobbying to use up the surplus in new Think Big projects. Worst is the hydrogen proposal, which is expensive to build, and incredibly expensive to buy the fuel cells, trucks, and infrastructure needed to get the hydrogen around the country or to an overseas buyer.

Next worst is electric drying and water heating for big industries such as Fonterra. It’s cheap to build the heaters, but it locks them into a wasteful use of our most valuable energy commodity, electricity.

The best use of the surplus today would be to sell householders a block of cheap or even free electricity, so they can afford warm dry housing at huge benefit to their health. That’s better than spilling water to waste, and with the savings they could finance energy efficiency or solar retrofits.

It’s important that the remainder of the monthly bill is charged at full price, so the retrofits pay back their investment costs. Retrofits employ New Zealanders throughout the country, and make householders more resilient to everything from power outages to climate change.

The electricity market is broken. The Electricity Authority dragged its feet in monitoring market manipulation, and consistently ignores submissions from householders. This is a failure of public policy, which is now overwhelmed by professional lobbyists.

Government must offer a new energy policy that promotes efficiency and meets the goals of social and environmental benefit, and urgently addresses climate change.

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