Power tools for the electricity regulator

By CHRIS DANIELS

Electricity Commissioner Roy Hemmingway has finally been issued with the weapons needed to fulfil his role as New Zealand's top energy regulator.

The Electricity and Gas Industries Bill, which has now become law, sets up a "co-regulation" regime for the gas industry and gives the commissioner his powers.

Energy Minister Pete Hodgson is keen to ensure wide-ranging powers of regulation across the industry, with a promise they will not be used if industry players behave themselves.

An earlier attempt by the big electricity companies to set up a system of self-regulation failed last year, leading to the Electricity Commissioner role being established.

One of the major powers the commissioner has is his ability to contract for reserve electricity generation.

Hodgson said the new act increased the scope of the Electricity Commission to encompass security of supply, consumer protection, competition, demand management, energy efficiency, conservation and the development of distributed generation, as well as involving it in the planning of transmission upgrades.

Hemmingway said the commission would spend up to $19 million in the next two years on energy efficiency measures.

New Zealand was one of the few OECD countries that had not "de-coupled energy use from economic growth".

Other changes under the new law include electricity lines companies now being allowed to own generation equivalent to the higher of 50 MW or 20 per cent of their network load.

The owner and operator of the national power grid, Transpower, is now allowed to contract for power generation, so it can manage reliability of the system.

The Commerce Commission, which runs a regulatory regime for all New Zealand's monopoly lines companies, will hand the job over to the Electricity Commission in March 2009.