Electricity priorities under fire

By LIAM DANN

The Government's policy objectives for the electricity sector suffer from a "green bias" that will limit the ability of the new commission to increase generation capacity, says the Major Electricity Users Group.

Executive director Ralph Mathes said there was a fundamental problem with the policy, which focused on "nebulous" references to sustainability and energy efficiency rather than providing a reliable infrastructure to underpin GDP growth.

In a list of objectives released on Sunday, the Government set three core goals:

* Ensuring that energy use is progressively more efficient and less wasteful.

* Developing and maximising renewable resources.

* Ensuring that New Zealanders have a secure supply of electricity.

It also wants to make sure "the electricity sector contributes to achieving the Government's climate change objectives".

Mathes said the Government had its priorities the wrong way round.

"What we actually need is a growth bias with some policies around the edges to mitigate the harmful effects."

While it was all very well to develop windfarms and other renewable power sources, the reality was that New Zealand needed significant new thermal coal- and gas-fired plants to meet its energy needs over the next decade.

"There's nothing in there that's going to encourage that," he said.

The main power companies - Contact Energy, Meridian, Mighty River and Genesis - all declined to comment on the policy announcement.

Their re-occurring corporate comment yesterday was that the information was being "digested" - possibly indicating that some of the policy details are proving difficult to stomach.

A Contact Energy spokesperson said the company was in no hurry to pass judgment but would take part in the submission process, which closes on October 10.

Meridian Energy spokesman Alan Seay said there appeared to be no major surprises.

The Electricity Commission's chairman, American Roy Hemmingway, is due to arrive in New Zealand today.

Commission's tasks

* Ensure security of supply and the protection of consumers.

* Organise reserve energy supply of 1200 gigawatt-hours over a four-month period.

* Develop and publish a "minimum hydro zone" estimating minimum lake storage levels required at different times of the year to avoid the risk of shortages in a dry year.

* Determine a secondary lake level that will trigger conservation campaigns.

* Prepare a set of minimum terms and conditions for contracts with domestic customers.

* Establish a free, independent system for resolving consumer complaints.