Comalco was the original reason that CAFCINZ was founded nearly 30 years ago. And it (both the company and its Tiwai Point aluminium smelter, near Bluff) remains just as obnoxious all these decades later. This year there was yet another "power crisis". As with the previous ones (they happen more and more frequently now) the country muddled through somehow. Once again we saw proof that the 1990s madness that converted electricity supply into a market (with nobody having any responsibility for security of supply) is an absolute disaster. The architect of it all, the former National government Minister, Max Bradford, is now well away from the shambles that he created.

The Government deserves credit for reassuming a hands-on role in the electricity supply sector. It will set aside a generation plant dedicated solely to guaranteeing supply in dry years and levy all power users to pay for it. The latter bit is what Comalco, true to form, is very keen to avoid. It stands to be liable for a levy of up to $25 million per year (as New Zealand’s single biggest power user – 15% of the national total - using about 565,000 times more power than the average household). It wrote to the Government that it is already paying for security of supply in its contract with State-owned Meridian Energy "and should not now be required to pay anything extra, directly or indirectly, for dry year reserve. In brief it is unacceptable for Comalco to be required to pay again for dry-year reserve to which it is already contractually entitled and for which it already pays" (Press, 23/7/03, "Power levy opposed", Marta Steeman).

And Comalco has an ally in Meridian. After all, it is the company’s biggest customer. Comalco’s fixed power price has always been a closely guarded secret, (the contract dates back to 1961 and has decades to run yet). Meridian’s Chief Executive Officer, Keith Turner, has defended an annex to the new draft electricity regulations, which opens by saying: "Nothing in the rules applies to or affects a Comalco arrangement or a relevant participant in a Comalco arrangement" (Independent, 30/7/03; "Meridian wants Comalco contract exempted from new rules", John Redwood). The Comalco contract was the reason that Meridian was the only power company to vote against (in May 2003) a voluntary regulatory system policed by the companies themselves. Turner said: "The Comalco contract contains special obligations derived from a different era and we would be remiss not to make very clear what we need. But at the end of the day, whatever the law is, we will obey it" (ibid.). Needless to say, the other power companies and their customers are less than happy about this never ending special treatment for Comalco and its secret power price. "Opponents of the application say it raises the spectre of the country taking cold showers while Comalco’s smelters continue at full speed" (ibid.).

As it is, Comalco continues to moan about how hard done by it is. 90% of its power is covered by that fixed secret price. But 10% comes from the highly volatile spot market (that jewel in the crown of the electricity supply market) and Comalco is preparing to pay higher spot rates next year. The 2003 "power crisis" cost it more than $35 million in lost sales.