Power companies face prosecution

By RICHARD BRADDELL

WELLINGTON - Energy Minister Pete Hodgson has put electricity line companies on notice that they will be prosecuted if they do not improve their public accountability.

But while Mr Hodgson conceded that exceptional circumstances, such as the industry's restructuring last year, had made the companies' task in providing information more difficult, he said last year's disclosures were still poor.

"I do not need to state again for the record that I expect line companies to do a great deal better this year. I have instructed the Ministry [of Economic Development] to take prosecutions where appropriate," he told the Electricity Networks Association conference yesterday.

Mr Hodgson also warned the companies that he would not tolerate line companies setting unreasonably high values on their networks and then using them as the justification for raising charges in order to maintain their return on capital.

Last year, all but three of the lines companies agreed to a price freeze - in a tradeoff to defeat a bill championed by former enterprise and commerce minister Max Bradford that would have provided a CPI-X formula to control prices. The freeze ends around the time the Government's electricity inquiry reports.

Mr Hodgson questioned the motivations of one of the three companies that had been unprepared to join the freeze. But he welcomed a proposal, put by the Consumer Coalition this week, that an industry ombudsman be established.

Reiterating hopes that industry efforts to develop satisfactory solutions would keep legislative intervention to a minimum, he urged haste in developing self-regulatory initiatives.

"Where you have not reached agreement, or where your interests are secured at the expense of customers, then a regulatory response from Government can be expected."