Electricity Commission chairman removed from office

Roy Hemmingway

Electricity Commission chairman Roy Hemmingway said today he had been removed from office by Energy Minister David Parker and he accused the Goverment of political interference.

"I can only conclude that I am being removed from office because I stood up to the Government as an independent regulator," he said in a statement.

Mr Hemmingway said he received a letter from the minister telling him he would be removed from office effective November 30.

Meanwhile, Mr Parker put out a statement saying Mr Hemmingway's term expired tomorrow and he had requested him to stay on until November 30.

Mr Parker's statement paid tribute to the role Mr Hemmingway played in establishing a new regulatory framework for the electricity industry.

He said New Zealand had been fortunate to have attracted the American-born regulator three years ago when he was appointed.

"Roy Hemmingway has done a very good job in overseeing the establishment of the Electricity Commission," Mr Parker said.

Mr Hemmingway said he was told some time ago he would not be reappointed at the end of his three-year term.

"It was my hope to leave my post sometime next year after finishing the work on the Auckland transmission upgrade, but I was turned down.

"I can only conclude that I am being removed from office because I stood up to the government as an independent regulator should.

"I have insisted that regulatory decisions be on the basis of the law and the facts and not on what politicians want."

He said he had been promised the Electricity Commission would be independent of the Government's wishes.

"This has not turned out to be true," he said.

"Regardless of what it says, this Government has not trusted regulation to deliver the outcome that only good regulation can -- that is, the lowest cost investment for the benefit of consumers.

"Politicising electricity decisions will hurt investor confidence in the sector and result in an even more confusing muddle of policies than now."

He said that in the past that had resulted in projects being built that were wasteful and unnecessary.

"New Zealand must be careful that this is not the result again."

Commission member Peter Harris, a former trade union economist and adviser to Finance Minister Michael Cullen, will act as interim chairman until a successor is found.

- NZPA