The Mike Hosking Breakfast

New Zealand's largest electricity generator may have spilled water unnecessarily, causing unnecessary gas generation to fire up and prices for consumers to rise.
On Tuesday the Electricity Authority released a preliminary decision that an alleged Undesirable Trading Situation (UTS) took place in the wholesale electricity market in late 2019.
In December a group of small retailers alleged that by Meridian Energy and Contact Energy controlled storage at their hydroelectricity generation in the South Island in such a way that more water was spilled than necessary. It came during a period of heavy rain.
In turn, this caused prices to rise to the point where thermal generation in the North Island was turned on.On Tuesday the EA announced that its preliminary view was that a UTS had taken place.
"What we found is not what we would expect to see given the market conditions in December," Electricity Authority chief executive James Stevenson-Wallace."We saw generators having to spill flood water to keep the levels down. What we didn't see and would have expected was lower electricity spot prices driven by lower offers from those generators spilling excess water," Stevenson-Wallace said.
"The prices remained relatively high despite an abundant supply of water and no increased demand during the period."
Contact Energy Mike Fuge chief executive maintained that it had been told that the company, as well as Genesis Energy, were not part of it.
In a statement, Meridian acknowledged that the decision had gone against the company.
"Meridian will review this preliminary decision and will make a submission to the Authority as part of its consultation process."
Previously it has denied manipulating prices.
"Plant availability and transmission constraints restrict the volumes we can generate. We don't spill unless we have to and only do so when required by environmental rules or to manage our dams safely during high inflow events," a Meridian spokeswoman told BusinessDesk in December.
The EA put the impact on the spot market at $80 million between December 3 and December 18.
Tuesday's decision is now open to six weeks of consultation, followed by cross submissions, with a final decision not expected for several months. Any decision could be followed by court challenge.
Luke Blincoe, chief executive of Electric Kiwi, said the preliminary view had found "strongly" against the generators, with the event heaping costs onto retailers.
"There are the types of events that are very, very hard on retailers and push up prices on consumers."
The modelling used in the complaint claimed the event caused the equivalent of 6000 tonnes of coal to be burnt than needed to be.
"They've spilled excess water that directly resulted in thermal generation being dispatched. From an ecological point of view, it's really serious, in our view."
James Shaw, the Minister for Climate Change expressed disappointment in Meridian, which has promoted itself as net zero carbon.
"I'd be concerned if companies are doing things that lead to an increase in our emissions when they don't need to, particularly for companies that are trading on a zero emissions brand," Shaw said.
"If what the EA is saying is correct and they're deliberately causing [the] Huntly [Power Station] to burn more than they otherwise would, that's obviously a bad outcome for the climate."
Parties in the complaint said it was the first time the EA had determined a UTS since 2011.
Steve O'Connor, chief executive of Flick Electric, said despite the company's belief that the market was "fundamentally broken" it was difficult to prove it, but the events of late 2019 were such that he suspected the complaint would be upheld.
"You need very clear evidence and it's only when you get to the extremes of the system that you can find sufficient evidence as opposed to the daily operation of the market … where we...

Hold the front page, Winston Peters and Jacinda Ardern are getting on together. Both appear determined not to open our borders.
Now that Europe is having fun in the summer holiday sun, and we are officially invited, and Ardern, true to reputation, says it's too dangerous. You get the sense she longs for the good old/bad old days where we were all locked down, doing as we were told, and "be kind" was all she had to say each day.
The fresh, brash new world of economic carnage and job loss is causing her some real consternation. The border is a mess, more PPE is needed, and they're running on borrowed money. It's all a bit angsty.
Coming to the rescue is Winston "give me a bubble now” Peters, who says who cares what the EU think, we are not being flooded with foreigners.
I think he's missing the point. The question we need to be asking is, what's the plan? Articulate the plan. If the borders are to remain closed, closed until when exactly? Ardern says the trans tasman bubble is up to the Australians. What's that exactly mean? What are we looking for, or waiting for?
When Peters said the Cook Islands bubble is closer than you think, is it not? I thought it would be underway by now. They have no Covid, we have next to no Covid, so what's the problem?
The power and importance of the question is because if you are keeping the borders closed, we need to know until when. Is until there is no more Covid in the world? Is it until there is a vaccine? And if that's the case, what the replaces the gargantuan hole in the economy while we wait for that to happen?
It's even more important given eradication isn't happening, and vaccine may or may not. So for how long do we wait until it becomes apparent plan "A" isn't happening and therefore we need plan “B?” And what is plan B?
None of these questions, and certainly none of the answers, have been forth coming. Tourism, planes, holiday makers, and hotels are worth between 12 and 13 billion dollars to this economy.
While that is no longer happening, what's the replacement? What's the strategy? And surely, tell me it's more than more printed money.
Welfare is a patch up, it's a band aid, and it's temporary.
Are we now saying it's permanent? Is that as good as it gets? Are we reliant on local tourism and jobseeker?
Peters and Ardern appear good at telling us what isn't happening. What we need desperately from them is, what is happening.

A leaked recording of a phone call made by Fisheries Minister Stuart Nash confirms that NZ First is controlling critical elements of the Government's fishing policy, Greenpeace says.
In the 2018 recording, obtained by Newshub, Nash explains the lack of progress on implementing the rollout of cameras on fishing boats, taking aim at NZ First MPs.
Nash says he will revoke the regulations putting cameras on almost 1000 boats, before ordering a review into the entrenched problems in the fishing industry.
"By revoking these regulations, first of all people like Winston and the industry will go, 'Oh there, there you go. That's fantastic, that's been done. We don't have to worry about this'," he said in the recording.
"Little do they know behind the scenes the tidal wave on this is coming and they won't be able to avoid it."
But the planned review didn't occur, Greenpeace said.
Russel Norman, executive director at Greenpeace, said the recording was the "smoking gun" that connected NZ corporate fishing companies to Government fishing policy, via NZ First.
"This recording from March 2018 proves what the Government has previously denied: that it was NZ First that blocked cameras on boats," he said.
"Recreational fishers, environmentalists and all New Zealanders will be appalled by the contents of the leaked phone call in which the Minister confirms that opposition by NZ First, a party bankrolled by the fishing industry, is the reason cameras on boats were blocked."
The previous government and then head of MPI, Martyn Dunne, agreed to put cameras on boats in 2016, after the Heron Ministerial Inquiry found significant problems of illegal dumping and MPI's failure to prosecute this dumping, Norman said.
Cameras on boats were identified as essential to monitor illegal fish dumping and the illegal non-notification of the deaths of dolphins and other animals caught in fishing operations.
Norman called on the Government to remove NZ First from influence over the fisheries policy, citing the party's "history of receiving cash from big fishing companies".
"This leaked phone call makes it abundantly clear that even the Minister of Fisheries privately believes that NZ First was the key decision-maker on blocking cameras on boats."
NZ First leader Winston Peters this morning released a statement in anticipation of the story, calling it "the worst form of unethical tabloid journalism".
"New Zealand First has worked constructively with its Coalition partner on hundreds of pieces of legislation and policy, and cameras on fishing boats is no different," Peters said.
"As the Fisheries Minister Stuart Nash will attest, New Zealand First raised legitimate concerns about cameras on boats, namely their cost and who would be able to access the data.
"It is vital that sound policy has sound implementation – we are not going to be putting fishing boats, crew and families out of business because of thoughtless bureaucracy."
It was Nash's office that asked to delay the introduction of cameras on boats, rather than NZ First lobbying, Peters said.

For the first time in over a fortnight, there were no new reported cases of Covid-19 yesterday.
There remain 22 active cases of the coronavirus in managed isolation, with one person in Auckland City Hospital in a stable condition.
But the short reprieve of new cases will not yet mean a loosening of our borders, which are set to remain firmly closed to the rest of the world.
Prime Minister Jacinda Ardern deemed the calls to re-open the border "frankly dangerous," saying to do so while the pandemic unfurled overseas would risk Covid-19 returning to our shores.
Imported cases had sparked outbreaks in New Zealand, and the current strict border measures were what allowed the current freedoms Kiwis could enjoy, as a resurgence of the virus in Melbourne forces Australian authorities to consider reinstating restrictions.
The Government was considering opening up to Australia and the Pacific, but anything further was currently out of the question, Ardern said.
The Ministry of Health is now assessing what it will do now with the 367 people it says it has tried "really hard" to contact after leaving their managed isolation or quarantine.
Speaking to Mike Hosking on Newstalk ZB this morning, Director general of health Dr Ashley Bloomfield says his team has sent "repeated texts, phone calls and emails" to those people but they were not getting back to them.
There were 2159 people who left managed isolation facilities between June 9 and 16.Of the 2159 people who left managed isolation facilities, 1284 people have now been contacted and have tested negative for Covid.
Eight hundred of these people were tested before leaving managed isolation and the remaining 484 were tested after departure from the facility.
There are 367 people who the ministry has repeatedly tried to make contact with but have had no luck tracking down.
"[They] are essentially not returning our calls. It is two weeks since they came out of their 14 day managed isolation so we're just having a think about what we do next."
Bloomfield agreed with Hosking that contact tracing only worked if people were prepared to be contacted.
"We can do the best we can do but there are obligations on everybody to do their bit as well.
"We only started rolling the testing out from 9 June. I'm really pleased we have and now we know from the 16th, people have only left the facility if they have been tested."
While that had been happening there had been no community transmission and the only positive cases were from people in managed facilities.
Asked whether the missing 367 offered zero chance of spreading Covid-19, Dr Bloomfield said he could "safely say that they do present a very low risk to the community".
"They all had completed the 14 day managed isolation so these people are a very low risk.
"They know what to do if they become sympomatic but we're not finding any Covid-19 out there which is encouraging."
Asked about the 367 and why the Ministry couldn't reach them and whether they had been giving false numbers, Dr Bloomfield said many had moved back to New Zealand without living here for a while so didn't have proper contact details.
"A lot of these people coming back to New Zealand having not lived here for a while, so their only phone number might be an international cellphone.
"Of course they get out of quarantine, get a new sim card we then don't have their phone number. They may not have a permanent address and maybe staying friends or with family for a while. It's not straight forward."
He said people leaving quarantine were now being assigned everyone their national health index number with "a lot of efffort" going into collating their for contact information.
There was still a "real challenge" in regards to capacity and housing returnees but there was more coming, he said.
"Every single one of them needs to be looked after, we've got to do al the...

Team New Zealand boss Grant Dalton has confirmed being scammed in a fraud relating to a Hungarian bank account.
He says the money that was effectively stolen was not public money and some of it has been recouped.
Those behind the deception may never be known or be brought to justice, despite fraud police here investigating, he said.
Speaking to Newstalk ZB's Mike Hosking this morning, Dalton was responding to revelations that there is an investigation into the use of public funds for the America's Cup defence next year.
It follows Herald revelations today that public money earmarked for the America's Cup - a $3 million loan to Team NZ - has been "reclassified", and a payment made to a "Hungarian bank account through fraud".
That is according to allegations outlined in a Ministry of Business, Innovation & Environment and Auckland Council letter.
The confidential letter, obtained by the Herald, is dated June 22.
In it, it reveals allegations around the handling of public money, the operation of the Cup itself and worries about public safety.
It also lifts the lid on officials' concerns that the event organisers, America's Cup Events (ACE) and Team NZ, are in breach of obligations.
The letter - written by council chief executive Stephen Town and MBIE chief executive Carolyn Tremain and sent to ACE and Team NZ - outlines "serious matters" raised by a financial investigation firm commissioned by the Crown to look into the financial management of next year's America's Cup in Auckland.

Emirates Team New Zealand AC75 America's Cup yacht pictured in September last year. Photo / ETNZ
Asked directly today if they had misused public money, Dalton was quick to answer: "No, not at all."
"One of the informants was in charge of the accounts of the event - and that's a really important point.
"So some time ago, I approved an invoice - I approve invoices all the time, of course - to a large contractor in Europe.
Bank account number in invoice not checked
"And no, I did not check the noughts and the ones on the bank account. I approved it - it was a correct invoice, there was nothing wrong with it, it was exactly per contract - and the money was sent to Hungary.
"So is that fraud? Yeah, it is. It's fraud in so much that...we were basically defrauded."
Dalton said the team immediately got in touch with government officials after they realised what had happened.
"Instantly, we rang MBIE [and] told them what had happened and that it was not government money - because it wasn't - and secondly, we got straight into the fraud police who have been working carefully out of New Zealand, but into Belgium and across through Interpol - and we've recovered some of that money."
Dalton acknowledged that they may never know who was behind the scam.
"We were defrauded by scammers - we don't really know. Police don't know yet and probably will never know. But some of the money is back," he reiterated.
Asked if there was anything that might come back to bite them, Dalton said no.
"Categorically, absolutely no. I guess that's one of the disappointing things about all this, because allegations are easy to make - they're often harder to defend."
Letter raised serious concerns with use of public funds
Among the concerns and allegations raised in the MBIE-council letter:
• "ACE has used part of the Event Investment for costs that have arisen but which are not in relation to the management and delivery of the Events";
• "This includes the $3,000,000 loan to ETNZ which was subsequently reclassified and the payment that was made to the Hungarian bank account through fraud";
• "Lack of record-keeping and unwillingness to provide the information that has been requested";
• "Material relationships with third parties that are not documented and which can be terminated ... upon 30 days' notice";
• "Poor governance including...

It seems show business can't get enough of the reboot, re-imagining or restart of TV shows and movies.
The Twilight Zone amazed audiences when the original series aired back in 1959. Now, a new version from Oscar winner Jordan Peele is airing on TVNZ On Demand, reinventing the sci-fi/horror anthology for the 21st century.
The second season features a number of notable stars across the episodes, including Billy Porter, Tony Hale, Christopher Meloni, George Takai and Morena Baccarin.
Baccarin made her name starring in Homeland and Gotham, as well as featuring in Deadpool.
She joined Mike Hosking to discuss her lockdown, joining the iconic series - and how Covid scuppered her plans to film in New Zealand.
LISTEN ABOVE
 

A change to some of the speed limits in Auckland will make a big difference to the city.
Most speed limits will go down from 50 kilometres per hour to 30 on more than 600 roads across Auckland today, including the central city.
Infrastructure transport expert Fergus Tate told Mike Hosking the goal is to reduce the number of crashes on the roads.
“The social cost of crashes in New Zealand is in the billions, and again, it depends whose loved one gets killed or seriously injured, but this will make a big difference."
There are concerns lower speed limits in Auckland will cause more traffic congestion, but Tate says city traffic jams have many other reasons for happening.
“The amount time it takes to get from one place to another is driven more by the amount of traffic signals in the area than the speed limits."
LISTEN ABOVE

Former French Prime Minister Francois Fillon was found guilty Monday in a fraud case of having used public funds to pay his wife and children more than 1 million euros ($1.13 million) since 1998 for work they never performed.
The couple's lawyers immediately appealed Monday's verdict from the Paris court.
Fillon, 66, was sentenced to five years in prison, three of which were suspended, and a 375,000-euro (more than $423,000) fine. He is also banned from seeking elected office for 10 years. He remains free pending appeal.
His 64-year-old wife, Penelope Fillon, was found guilty as an accomplice. She was given a three-year suspended sentence and fined the same amount.
In addition, the couple was requested to reimburse the National Assembly more than 1 million euros that correspond to the salaries and payroll charges that were paid. The penalty is suspended pending appeal.
The scandal broke in the French media just three months before the country’s 2017 presidential election, as Fillon was the front-runner in the race. It cost him his reputation. Fillon sank to third place in the election, which was won by Emmanuel Macron.
The Paris court considered that Fillon “elaborated and established an organization enabling to misappropriate money for his personal use.”
In a statement, the court said that “nothing concrete has been proven in court regarding the work of Madam Fillon.”
“She did not have any professional activity alongside her husband," the court added. “Nothing justifies the paid salaries."
Fillon and his wife have denied any wrongdoing.
Fillon's lawyer Antonin Levy told reporters “there will be a new trial ... We will be able to get a full and serene debate that will finally allow justice to be made.”
Penelope Fillon’s role alongside her husband drew all the attention during the February-March trial, which focused on determining whether her activities were in the traditional role of an elected official’s partner — or involved actual paid work.
Prosecutors denounced “fraudulent, systematic practices.”
Fillon was accused of misuse of public funds, receiving money from the misuse of public funds and the misappropriation of company assets. His wife was charged mostly as an accomplice.
During the trial, Penelope Fillon explained how she decided to support her husband’s career when he was first elected as a French lawmaker in 1981 in the small town of Sable-sur-Sarthe, in rural western France.
Over the years, she was offered different types of contracts as a parliamentary assistant, depending on her husband’s political career.
She described her work as mostly doing reports about local issues, opening the mail, meeting with residents and helping to prepare speeches for local events. She said working that way allowed her to have a flexible schedule and raise their five children in the Fillons’ countryside manor.
Prosecutors pointed at the lack of actual evidence of her work, including the absence of declarations for any paid vacations or maternity leave, as her wages reached up to nine times France’s minimum salary.
Francois Fillon insisted his wife’s job was real and said that, according to the separation of powers, the justice system can't interfere with how a lawmaker organizes work at his office.
A former lawmaker, Marc Joulaud, also went on trial in the case for misuse of public funds after he allegedly gave Penelope Fillon a fake job as an aide from 2002 to 2007, while her husband was minister. He was found guilty and sentenced to a three-year suspended prison sentence.
In addition, charges also cover a contract that allowed Penelope Fillon to earn 135,000 euros in 2012-2013 as a consultant for a literary magazine owned by a friend of her husband — also an alleged fake job. The magazine owner, Marc de Lacharriere, already pleaded guilty and was given a suspended eight-month prison sentence and fined 375,000 euros in 2018.

Climate Change Minister James Shaw is dousing farmer concerns that prime farmland is being bought for forestry.
Farmers are worried that more farms are being converted to forestry with planting estimates ranging up to to 70,000 hectares a year.
Shaw says only about 13,000 hectares were planted last year and deforestation is faster than new plantings.
James Shaw told Mike Hosking he concedes farmers are justified about being worried in some parts of the country.
"I'm not worried about the impact of food production, but I do know some communities are feeling like their world is being upended."
Farmers are frustrated the Government is focusing too much on tree planting to reach carbon zero targets,  instead of reducing fossil fuel consumption.

The British government is reimposing an array of lockdown restrictions, including the closure of schools, in the central city of Leicester after a spike in coronavirus infections.
Health Secretary Matt Hancock told lawmakers late Monday after a series of meetings, including one chaired by Prime Minister Boris Johnson, that in addition to the school closures, shops that don't sell essential goods, such as food and medicines, will have to shutter themselves again, barely two weeks after they reopened.
He said the government had to take “difficult but important decisions” for the benefit of Leicester's population, which is thought to number around 350,000.
“Local action like this is an important tool in our armoury to deal with outbreaks while we get the country back on its feet,” he said.
The re-imposition of lockdown restrictions for Leicester — the biggest local tightening taken by the government — went further than had been anticipated and is likely to prove a cause for concern among the city's highly diverse population and those who were looking to reopen their businesses this Saturday.
While confirming that Leicester won't be joining in the easing of the lockdown this Saturday when pubs and restaurants are due to reopen in England, Hancock said further actions were necessary to get a grip on the local outbreak that's seen the city account for 10% of all positive cases in the country over the past week. Hospital admissions are between six and 10 a day, also higher than in other places, he added.
Hancock said non-essential retailers, such as department stores and electronic retailers, will have to close again from Tuesday, two weeks after they reopened. In addition, he said schools will have to close from Thursday as children have been particularly hit during this outbreak. They will remain open for vulnerable children though. He also said that travel to, from and within the city will have to be curtailed and social distancing rules will be monitored.
“The more people follow the rules, the faster we'll get control of this virus and get Leicester back to normal,” he said. “The virus thrives on social contact and we know reducing social contact controls its spread and precise and targeted actions like these will give the virus nowhere to hide and help us defeat this invisible killer."
The lockdown in Leicester will be reviewed in two weeks.
Concerns over Leicester have mounted in recent days following the increase in cases, though there has been some confusion as to the government's intentions following a weekend of mixed messages that appeared to come as a surprise to local officials.
Hancock said the government was providing extra testing capacity in the city and that Leicester's “proud diversity” will be taken into account, notably in the translation of the new guidelines into all relevant languages.
Ahead of the meetings Monday, Leicester’s mayor, Peter Soulsby, said he had yet to be persuaded that the city is faring any worse than other places in England, and sharply criticized the British government over its handling of the situation
The U.K. has recorded 43,575 coronavirus-related deaths, the highest by far in Europe. The government, which sets the coronavirus response for England, has said it won't hesitate to reimpose lockdown restrictions on a specific region in the event of a local outbreak.
“We are concerned about Leicester, we are concerned about any local outbreak,” Prime Minister Boris Johnson said earlier Monday while on a visit to a construction site in London.
“I want to stress to people that we are not out of the woods yet.”