Inquiry gets power team

By RICHARD BRADDELL

WELLINGTON - Energy Minister Pete Hodgson yesterday announced the personnel and terms for the Government's first significant inquiry into electricity.

He said an inquiry was needed because it was believed that the industry's restructuring had brought higher rather than lower prices.

While spot electricity prices had fallen in the past 12 months, retail prices had risen by up to 3 per cent.

The inquiry will be headed by David Caygill, a former Labour Government minister and now a partner in law firm Buddle Findlay.

The other two members are Dr Susan Wakefield, who under her former surname of Lojkine chaired the Commerce Commission between 1989 and 1994, and Stephen Kelly, the managing director of the Australian National Electricity Code Administrator.

Professor Stephen Littlechild, a former UK regulator, will advise the panel.

The inquiry members have taken the unusual step of declaring conflicts of interest and accepting a trading ban on shares.

Buddle Findlay has acted for several electricity companies, while Dr Wakefield owns shares in Contact Energy and Natural Gas Holdings.

Mr Hodgson blamed the previous government's changes for creating the uncertainty that made the inquiry necessary, but he said many countries were grappling with the same problems and "imaginative" solutions were possible.

Mr Caygill and his team will visit Britain, the United States, Australia and Norway.

The inquiry is set to cost $850,000, excluding GST. It will report by June 12 after holding public hearings in main centres.

Mr Hodgson said he hoped to "gently hustle" the industry into solutions, but would regulate if needed.

He said Labour had a good relationship with the players, which was why he could persuade the lines companies to accept a price freeze last year when opposition parties blocked then Energy Minister Max Bradford's lines company price control legislation.