Auditor-General holds off on inquiry into planned gas terminal

The Auditor-General has decided against starting an inquiry right now into the Government's plans to build a liquefied natural gas terminal in Taranaki. However, his office stated it still remains interested in the project as it moves forward.

The Request

In August, several consumer and climate groups asked for an inquiry due to worries about transparency and value for money. The groups signing the request were Consumer NZ, Lawyers for Climate Action, and the Sustainable Business Network. They argued the project was being rushed toward an artificial deadline without giving proper thought to other options.

Official Response

In a letter explaining why he turned down the inquiry request, Auditor-General Grant Taylor noted that his office met with officials from the Ministry for Business, Innovation and Employment. Those talks showed that work is still ongoing to update and review the financial, economic, and strategic case for the gas solution. Taylor pointed out that officials are still figuring out who will pay the costs and how cost recovery will work. The Government previously planned to fund the terminal via a levy on all electricity users, but dropped that plan in June and has yet to reveal new funding details.

Context

When large government energy projects involve public resources and third-party providers, oversight bodies often monitor the planning stages closely to ensure public funds are spent wisely. Energy projects of this scale typically require careful study of long-term costs, price impacts on everyday consumers, and possible alternatives before final contracts are signed.