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and NZ's Electrical Grid
Response on the Sustainable Energy Forum to Sunday Star Times article which claimed Harry Stebbing's research is a "bombshell for generators".
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Radio NZ Link
featuring Geoff Bertram
The Government is being urged to break the deadlock that large power
companies have on renewable energy. (duration:
The following may
be helpful to newer SEF members and others.
Thanks Molly for the post. I have just read the Harry Stebbing article. I was unable to access a couple of the Geoff Bertram links and the one I could access is in such an incoherent Internet form I gave up trying to read it.
Web note: At the time of the writing of my SEF posting I was unable to link to Geoffbertram.com. Acess seems OK now
read enough to see that Geoff provides a greater historical overview
than Harry – life begins for Harry in 1969:
“A series of recurrent crises beset the public
utilities in the years following 1969….The campaign for free markets
was remarkably successful at both federal and state levels in the United
This said the
articles are framed by two critical errors.
The first is they
fail to provide the reader up front with the information that we are in
the middle of an ongoing war over how we use our electrical potential.
Banker J P Morgan and Thomas Edison saw from day one of the
existence of electrical grids in the 1880s that ownership and control of
them could provide them with ownership of the much of the wealth of this
planet. In particular an elite of merchant, especially J P Morgan,
realised they could concentrate and own spectacular wealth by linking
the world with electrical grids that they controlled to Bulk-generators
of electrical products that they also controlled. Ownership of these
plants enabled them to maximise their short-term profits from their
other assets (fossil fuels in particular).
lessons of World War 11 were forgotten or not learned by the new breed
of policy makers of the 1980s and for the last thirty years we are back
in a cycle where an oligarchy of merchant bankers are gaining increasing
control of our use of our electrical potential again and concepts of
“energy efficiency”, Civil Defence, social and carbon stewardship
etc are now accounted for as liabilities. In this context the current
global economic meltdown and the now very high probability of
catastrophic warfare by 2013 was predictable and predicted a decade ago.
The second critical error is that both Geoff and Harry (and other self-styled “energy experts”) frame the discussion as a problem of “deregulation” and “freemarkets”. In doing so, for whatever reason, they have nullified and destroyed the bulk of their arguments while serving the interests of the bankers. Examples from Harry are:
Electricity Industry Reform legislation was implemented it was legal for
communities to create democratically elected, “service driven”
cooperatives to participate in the national electricity market and make
intelligent use of their local electrical potential. Thus historically
we had some 60 community based cooperatives representing every region of
New Zealand and these all participated directly in the national
electricity market, as did several large corporations.
First the 1993
legislation effectively forbade the existence of “service-driven”
groups participating in the national electricity market and then the
1998 legislation removed the right of communities to own their grids and
***Note re the
use of the “retail” symbol:
In the “profit
driven” ethos everything is viewed as a commodity – including
humans. (Witness the way a million New Zealanders have already been
traded this century with little or no knowledge of the implications of
that trade. Are you one of them?)
Thus we now have the
energy commodity” and it is legislated as an object of “retail”,
not “intelligence”. When service-driven community co-ops were legal
in New Zealand councils were free to used the intelligence of their
local grid to assess the state of local welfare, address equity issues,
actively create technology and strategies to conserve mineral and other
resources, develop world leading programmes educating their members
about wise uses of resources and construct integrated Civil Defence
systems. I know this is a fact as I experienced the deep integration of
the MED’s intelligence into the Christchurch City Council structures
and committees in the 1970s-early 80s.
regulatory regime is vastly hostile to such values and now the
reticulation of Bulk-gen electricity is now seen as a retail product
“no different to cabbages or bread” and Dwelling-gen electricity is
taxed and regulated as a noxious substance.
This amoral construct
of our electrical potential was actively promoted here in New Zealand
and in the likes of Enron by organizations such as the now infamous Arthur
Andersen and Co.
The regulations are
now even more heavily weighted towards the bankers. As mentioned
individuals are now unable to effectively own the knowledge of their
dwellings consumption patterns. This loss is compounded by the fact that
they no longer have a democratic say in how the corporations can use
I have just received,
for instance, a long letter from Flybys offering me “100 reasons to
switch to Contact …As a Fly Buys Member, here’s an easy way to power
up your points.”
Now I know Flybuys
monitors most of my supermarket purchases and it is rumoured to profit
tenfold off every $point I “earn”. Who knows who they sell that
information to and how it is used to manipulate prices and my purchases
of basic commodities. A Contact
Positive Energy/Flybuys deal with the advent of smart metering
has vast implications for the design and use of dwellings and the
appliances in them.
I rang Meridian and
asked if I could use their ARC
technology to broadcast information of my household consumption
and practices to agents of my choice. My question was greeted with
incredulity and laughter. Imagine if Folole Maliaga’s household could
have broadcast to a monitoring computer at their local council or
hospital. She might have died a half dignified death.
I just rang PowerShop
the Energy Centre and the call centre could not inform me who
would own the meter board in my dwelling if I join them. Initially the
operator said I would own the meter but then became doubtful about that.
They have promised to get back with a more informed answer.
The articles in the
Sunday Star Times and academic papers reveal the derelict nature of our
media, our academia and almost all of our so-called “energy
consultancies”. The headline “Bombshell set to hit generators” is
garbage and is indicative of how out of touch with reality these groups
The simple reality
is that the Electricity Industry Reforms are working exactly as they
were planned to when they are placed in the fuller historical context I
stressed to maximum. Tick
mechanisms disabled if not dismantled. Tick
Not a single New
Zealand community now owns or has access to the intelligence of its
local grid. Tick
equated with deprivation. Tick
education programmes promoting wise resource use destroyed. Example Energy
of Energy Gobbledygook and Banker Speak. Tick
freehold community owned network services to highly leveraged Banker
controlled instruments. Think Wachovia Bank (Wells Fargo), Babcock and
Brown, Queensland Investment Corporation, Cheung Kong Infrastructure
Holdings Ltd (CKI), et al. Tick
embedded into new technology systems. Tick
Removal of “service
driven” individuals from Bulk-gen Electricity industry and replacement
with “profit driven” individuals. Tick
Transfer of hundreds of billions of dollars from communities to corporations. E.g. flat line corporation prices versus exponential increase in domestic prices since the Reforms.Tick
Increased control of
design and use of dwellings. Tick
effectively excluded from Electricity Market. Big
distributed generation systems. VERY BIG TICK
Every box a tick.
Academics, so called
“energy wonks” and journalists who do not understand that the
legislation is working exactly as it is designed to are either fools or
naïve to the point of being menaces to humanity. It is a complete waste
of our electrical potential to tie up computers for weeks on end with
calculations as Harry is reported to have done. His number crunching
will be of no greater help for humanity than that of the mathematical
whiz kids who calculated risk in mortgage, currency, commodity and other
derivate trades. The algorithms are almost all based on the fallacy that
the activities of corporations coincide with the survival of humanity.
Most are based on the fallacy that energy= mineral oil/gas and can be
priced at 0.1 cents per man-hour labour equivalent.
Thus my prediction is
that because Harry’s work lacks critical context the banking oligarchy
will use his calculations and spreadsheets to enhance and embed the
unsustainable status quo. In particular I predict:
I hope I am wrong. I
will add a few notes for the benefit of those who believe my commentary
Enjoy all your
electrical, solar, carbon and other potentials.
Re accountability and blame.
We need to be careful about assigning blame here - if all each
electricity producer has done is follow their instructions to work to
the short term advantage of their shareholders (mainly government), then
condemnation is hardly appropriate.”
This is a difficult
balancing act in a small nation where many of us are acquainted, if not
related. I recommend watching the movies “The Corporation” and
“Enron –the smartest guys in the room”. It is very important that
I make it clear that there is a difference between acknowledging the
modern corporation is a psychopathic structure and saying individuals in
them are fully-fledged psychopaths. We are each retain psychopathic
elements, some folk more so than others. It is possible to identify the
Electricity Industry Reform legislation as fundamentally a psychopathic
Those of us who
actually experienced the change from being in a service-driven
organization to a profit driven organization (in my case Wellington MED
to Capital Power-TransAlta) witnessed a huge change in culture. I recall
sitting around with other meter readers one day early in the process and
we predicted with almost 100% accuracy which staff would thrive in the
new culture and which would be “released” over the next couple of
The first group,
"the thrivers", which included the new breed of
university-educated managers, tended to be self-serving and career
oriented. They could not be trusted to stand up for the common
good/human rights. PR and Damage Control rather than problem solution
was their forte.
The second group were
industry educated, service-oriented, vocation motivated and they could
better trusted to put their neck out to protect the common good/human
rights. Problem solving rather than PR considerations was their forte.
We observed how life
became very uncomfortable for the latter group as their qualities
reverted from being assets for them to being liabilities.
They were sidelined and most were restructured out of the
industry if they did not leave voluntarily.
A country or major
industry with a culture that rejects such people as liabilities puts all
its citizens at very considerable risk. It is very easy for criminality
to infiltrate a nation or industry and thrive in such a culture. I am
not saying all those who continue to be employed in our Bulk-gen
electricity are bad people. I am saying they become much happier,
fulfilled people when they are able to believe their work is more than
just a way of keeping off the dole. I believe there are many compromised
and quietly desperate employees in the Bulk-gen electricity
corporations. They deserve a system that genuinely enables them to care
for their communities and “look their children in the eyes with
dignity”. (Recent quote from a very able and traumatised person who
came from a “service industry” into one of our Bulk-gen electricity
corporations and discovered to her horror that “for all their talk,
underneath our managers don’t care in the slightest what happens to
I am also saying
those highly paid individuals who control and reinforce the current
unsustainable corporations should be made accountable. This includes
those in our universities, media and Government. If they persist in
promoting policies when there is clear evidence their policies damage
the greater good then mechanisms need be in place whereby their income
can be clawed back. It is dangerous to say, “these people are doing
what the legislation of the country bids them do” when there is clear
evidence that the legislation they endorse is putting the majority of
the population at significant and needless risk. There is plentiful
literature of Fascist Germany illustrating the dangers of this policy.
I have vivid memories
of the abuse I received as a meter reader after the Wellington City
Council gifted Capital Power to TransAlta for a token return. Up to 90%
of Wellington people opposed this transfer, myself included. People on
my meter rounds who I respected and who had previously respected me
began calling me a “moral coward”, a “scab”, a “traitor”, a
“selfish bastard” for continuing to work and earn money from the
TransAlta Corporation. My betrayal was seen as all worse because they
deemed me “an intelligent and personable bloke”. Their vehemence and
disgust had to be experienced to be believed. It was entirely
understandable and I would wish it on no one. Within three years I had
“ceased” (Employment Court term) to be a meter reader after 20 years
in this vocation.
Mindful of this
context how does one make a dispassionate appraisal of someone like Hon
David Caygill? Dave was the youngest serving Christchurch City
Councillor at a time when it was an exemplar of how we can use our
electrical potential intelligently. I know – I worked for the Chch MED
for that decade. The lessons in democratic/sustainable practices were
staring him in the face and yet he remained oblivious to them.
As Minister of
Finance Dave was pivotal in a “sale” of Telecom that has resulted in
the massive destruction of much of our electrical potential. Done in the
name of competition it created a massive private monopoly and fragmented
our electrical structures in ways that have most probably destroyed
scores of billions of dollars of NZ wealth already. At the time when I
objected to the proposed sale Dave kindly sent me the Treasury briefing
papers promoting the decision to sell. These documents were jaw-dropping
in their ignorance and superficiality and I recall as a humble meter
reader being shocked to think people were paid for writing such
ill-informed and flawed material. (I had worked seven years in the NZ
Post Office and knew well its relative integrity, efficiency, historic
innovation and potential.)
As Chair of the 2000
Parliamentary Inquiry into the Electricity Industry, then as a
consultant to “energy” Ministers and then as Chair of the
Electricity Commission Dave compounded this destruction of wealth by
embedding the Electricity Industry Reform legislation into our social
and technological fabric. Hon Gerry Brownlie, our new minister of
“Energy and Resources”, values him as a potent source of
institutional knowledge (MR Nat Radio last week). How does a nation make
some one like Dave, arguably the most powerful New Zealander of this
last generation, accountable? What is the vision that enabled him to
ignore and destroy so much that was sustainable in the Christchurch
Council from whence he came? How do we explore this in a spirit without
blame? How can we educate
Gerry? A child of ten with even a minor grasp of the Conservation
Principle of Energy can see Gerry is away in the Lala Land of the
It’s a great
challenge that we must face if our economy is not to be destroyed by
inequity and war.
2 Footnote re impacts of Economic Reforms as manifest in the Electricity Industry Reforms.
Here are a few
historical facts for the interest of proponents of these reforms in our
universities and media.
impacts on Wellington region.
About 1993 Wellington
MED renamed Capital Power and restructured as profit driven entity as
per new legislation. Quote CEO John Boshier to staff (perhaps
paraphrased a little): “Yesterday we were a service-driven company.
Today we are profit driven company. Neither you the staff nor the public
will notice any difference. The big difference for us management is that
we have always been freehold up till now and thus have never had to do
debt management before. That will be new for us…”
Appliance Show Room
start getting discounted deals and services while small businesses and
households, especially those with low consumption rates, become subject
to rising charges and a reduction in services.
“business customer advisory group” and use of Time of Use data from
new logger system goes into limbo –“managers don’t know what to
with it in new profit driven ethos”. In the new context promoting true
energy efficiency practices in the Wellington community were now
counterproductive to new “profit driven” imperatives.
driven by fear e.g. “Neigbouring Hutt Mana Energy Trust will put pipe
line down to Wellington and suck away our biggest clients and destroy
our value.” Panicked or corrupt Wellington City Councillors
“sells” 49% of Capital Power to TransAlta and gift it management
rights and sale rights.
almost total day-to-day control of asset and begins gutting it of value.
Quality Management Programme goes into limbo. Quote new CEO
Peter Blades: “We have
got to the point now where quality is so good we don’t need it
anymore”. Note: a Deming fundamental is that profits from quality
improvements are used to ensure staff stability.
Onset of widespread
layoffs beginning with consumer advisory officers, including new
business advisory group. Systems for Meter reader reports on state of
field technology (meters, ripples) are demolished – data now seen as
of “no value – you are just there is read meters now, That’s
struck with Saturn to load wrist thick optic fibre on City network
poles. (Public told they will be finger thick fibre). I propagate prediction that this policy will put grid at
serious risk. Mayor Blumski and WCC CEO Garry Poole publicly deride
Council sells remaining stake to TransAlta. TransAlta lays off most of
remaining staff and retains token presence in Wellington City.
Industry Reform legislation forces all communities and corporations like
TransAlta to divest of either their lines or its intelligence (their so
called “retail divisions”). TransAlta retains latter plus Government
legislation gifts them about 800,000 meters and dwelling based ripple
controls i.e. approx half of NZ meter boards. Other critical elements of
the ripple system remain with grid owners, thus destroying all
imperatives to maintain meter integrity and effective load control
Note: I asked
officials why they gave away such an enormous asset as the ripple relays
to the “gentailers” and they shrugged their shoulders, look a bit
stupid and said, “ Well I don’t think much thought really went into
it… I guess it just seemed logical to give them to the
“gentailers” because the ripple relays were on the same board as the
meters.” No one could explain to me why the “gentailers” were
given the meters and for such a vastly discounted price. Some tried to
suggest that giving the retailers the meters would promote
“innovation” in products. Clearly these policy makers have no idea
of the powerful role metering plays or of what democracy is and the
rights of individuals to own the information of their dwellings and
lifestyles. History has proven their decision simply provided the meter
owners with a pure cashflow of several hundred million dollars on
“rentals” of what most people had previously owned freehold. It also
destroyed most of the potential for true innovation.
control of most of Capital Power, Hutt Mana and South Power customers =
approx 520,000 dwellings = approx one third of NZ dwellings. These
communities had facilitated world leading Energy Action programme
into 1400 schools communicating wise uses of resources, especially
electrical, carbon and atmospheric resources. TransAlta ceases to fund
programme. Programme ceases in 2000. This is understandable as it is
counter to the imperatives of the Electricity Industry Reform
legislation. (TransAlta– NGC/OnEnergy were major fossil fuel
destroyers with significant investments in Bulk-gen electricity plant.)
The current situation
is Wellington City has now lost almost all control of its electrical
potential with ownership changing hands every two/three years. Thousands
of its poles became profoundly stressed and close to collapse until
salvaged by Auckland people (Vector Ltd).
See Photo essay. One Vector permit application to the WCC
was for the replacement of 1800 poles though the WCC councillor who told
me this had no idea why the poles had to be replaced! Electrical systems
supporting the city’s trolley bus network are now at high risk with
little back up left. The city has lost most of the advantage of its
electrical potential (broadband, distributed generation, transport) and
despite being blessed with outstanding geo-political assets it is now in
many ways bankrupt.
Examples of psychopathic behaviour.
Century definition of it as the behaviour of a “moral imbecile”
remains helpful. It is characterised by a lack of capacity to enjoy
compassion and stewardship. Enhanced manipulative behaviour for
short-term gain is characteristic. This behaviour pattern tended to
become more prevalent in the Bulk-gen industry after the Reforms, which
is understandable as the legislation reflects and is based in a moral
vacuum (Some amorphous social entity called “The Market” will act
for us as our steward.)
The ethos of the new
management system is well documented and illustrated in the practices of
Enron where each
year 10% of the staff were laid off annually to maintain a fear factor.
Similarly in NZ staff were put on short-term contracts. Examples were
made of middle managers who retained their integrity and who attempted
to question the lack of morality underpinning new policy. More senior
managers ostracised them, refused to take calls from them for months on
end, refused to acknowledge communications in which middle managers
expressed concerns about threats to the public good, blamed lower level
staff for problems they no longer had effective responsibility for etc.
These middle managers compromised by either suppressing their concerns
or leaving the industry.
I was a just a meter
reader and not exempt. I was also known to be honest and articulate.
Senior managers “binned” my 25 years of exemplary work records to
discredit me. They had it be known to me they would “annihilate my
family legally” if I spoke out publicly about my concerns for the new
industry policies and practices. I have reason to believe my sanity was
made a subject of public question as managers attempted to cover their
butts. Eventually after I “ceased” my employ in the industry the
Employment Court ruled in 1998 that I did have a legal right to blow the
whistle on new meter reading contracting systems that allowed the
criminal fraternity very easy access to Wellington city’s
keys/security systems. I cannot talk about the period May1996-September
1997. However I can say subsequent to this period I was repeatedly
threatened that my family would be raped and worse and our family home
“trashed” if I did not “keep right out of the electricity
industry.” I had much reason to take the threats seriously. Our family
is now broken up and the family home sold.
It is interesting to
note that all my concerns were subsequently confirmed as valid,
including my concern expressed in 1996 that the TransAlta structure was
so fatally flawed it must implode and could bring down our national
economy with it if it persisted any period. The corporation structure
collapsed in 2001 within weeks of Enron.
Example of service v profit driven behaviour.
Council was proposing to double the number of coin prepaid meters
(350>>>700) to help low income families budget. It had
identified that many households were struggling in the wake of the
unemployment and the 60% increase in Bulk-gen electricity tariff that
occurred as a consequence of the 1979 mineral oil price spike (From
memory the Hon George Gair had tacked the price of Bulk-gen electricity
onto the global price of mineral oil though the likes of Comalco may
have been exempt).
As a meter reader I
had the practical knowledge and was able to outline to city councillors
the major flaws in the proposal and its risks for households. I also
proposed an alternative scheme that addressed a central issue – very
high winter bills v summer bills. I proposed the council use its
intelligence of total annual consumption of a household and estimate the
monthly average. The household would pay this average starting a cycle
in autumn thus building a small credit. The Council would extend credit
over the winter/early spring if necessary and the debt to the Council
would be paid off over the summer.
The scheme was an
instant success, solving many of the budgeting problems of households,
reducing security risks all round and cutting MED debt management costs
dramatically. Within about five years the scheme had been adopted on a
national scale, including at Capital Power in Wellington, in schemes
known variously as Easy Flow, Even Flow and Smooth Flow.
The success of the
scheme was because it is based on quite sophisticated knowledge and
thinking that is counterintuitive to the “profit driven” ethos that
now reigns. It can be summed up as “Do something as a careful service
and it will profit. Attempt to profit from that service and it is
cost.” The new breed of
managers that thrived in the corporatised Wellington MED-Capital Power
could not understand this logic. They attempted to profit by $75000
annually by reducing meter readings from 6 to 2 readings per year for
Smoothflow payment customers.
saving” figures were based on their new contract meter reading systems
i.e. a saving of $3- $5 per meter per year. Under the traditional
in-house service-driven system the 4 readings actually cost under a
dollar total but the new managers lacked knowledge of the industry and
could not understand that. Nor did the new managers understand the value
of other information meter readers used to provide – value that
probably completely offset the cost of obtaining the readings.
The increased meter
reading costs were of little concern to the new managers as the Reform
legislation meant they did not affect the bottom line of TransAlta
(Canada). The Wellington community had no say now in the system and
TransAlta could simply pass on the costs to the community. Similarly the
state and accuracy of the meters and ripples were of no concern either
as the Wellington community no longer had any say in its local grid or
the intelligence of that grid.
I was sufficiently
concerned for the public good that I wrote a four page paper to the
TransAlta managers explaining the logic of even payment systems and
predicted that for every dollar saved Capital Power-TransAlta would
incur two dollars costs i.e. over $150,000.
My estimate was most inaccurate!
The first year a
profit was made from the new policy. Then the impact of the destruction
of intelligence hit as estimation algorithms became exponentially
flawed. Households became stressed by unexpected debts. TransAtla’s
new call centre, designed for 100,000 calls a year, was suddenly
besieged with irate customers at a rate over twice that. The average
waiting time per successive call blew out to 18 minutes and I heard
reliable reports of an 80% drop-off rate. Soon TransAlta had hired 220
call operators in an attempt to cope. Even with this number I found as
an employee/subcontractor I could no longer ring my company from in the
field. Previously for decades my calls had always been answered in
efficient and knowledgeable ways within a couple of rings using probably
less than the equivalent of 50 switchboard operators, maybe even less
than 30. It was clear I had underestimated the costs of attempting to
profit from services by as much as 10 fold. Indeed TransAlta lost so
much good will that its name became a serious liability.
5. Footnote re
“damage control” v “problem solving”.
As with many other
sectors, the role of meter readers was redefined in the new corporate
“profit driven” ethos. Our
work was severely devalued, we were told we were “liabilities while on
the books” and that we were “history”. Thus it is not surprising
that many of us got demoralised. One meter reader reacted by failing to
climb the steeper streets of the eastern hills of the Hutt and simply
estimated household usage. After some months and increasingly inaccurate
bills the issue hit the media. To use their own words the managers went
into “damage control”. They issue media statements saying the meter
reader had an “eyesight problem”. They got so caught up in their own
PR Spin that they ended up believing in it. As a result they had the
eyesight of all the meter readers in the Wellington region checked, much
to the hysterical laughter of all the many who knew the true situation.
TransAlta had just released both the Hutt and Capital’s safety
officers as redundant and one of them was contracted back in to check
the eyes of meter readers. This person told me she had no concern for
our eyes and had suggested to TransAlta she should really be checking
those of the line’s workers. Managers said this was needless and so
she had voluntarily provided this service and found, as suspected, five
were completely colour blind.
6 Footnote A confluence of several great new technologies is occurring – broadband, 220 v grid communication, microwave, “smart monitoring systems (meters) and appliances and dwelling based generation of resources.
The degree that
communities can exploit the
enormous potential of this confluence determines their capacity to
survive the passing the Cheap Mineral Oil/Gas era. I have devised a
prototype grid rating system. It suggests New Zealand’s
potential has been diminishing for twenty years now and continues to
This article is provided free to all as a public service.
SEF Posting by Molly Melhuish , consumer advocate.
Sunday, 1 March 2009 8:47 a.m.
*"Bombshell set to hit generators" *So
shouts the Sunday Star-Times, on
Posting by Alastair Barnett
Monday, 2 March 2009 10:00 a.m.
Murray, We need to be careful about assigning blame
here - if all each
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