KEY POINTS:
It could be lights out at the Electricity Commission if a business group's attack on it holds sway in a ministerial working party's review of regulatory issues facing the power sector.
Energy Minister Gerry Brownlee says a Business New Zealand report on governance in the power sector may form the basis for recommendations on future regulatory and governance arrangements.
While in opposition the minister was a critic of the commission but since coming to power he has been careful not to single it out.
But yesterday he said the study highlighted tension points and would be "a document that's going to be useful in the process".
"It is pretty harsh in the way it treats the Electricity Commission but you've got to step back from names and titles."
The commission was set up nearly six years ago and channels system-operator payments to Transpower and assesses its major proposals, keeps standby generation at Whirinaki available, runs an energy-efficiency programme and does compliance and market monitoring work.
In the current year it has a budget of around $90 million.
Among other criticisms, the Business NZ report says the commission does not have the independence from short-term political considerations to set price and service, or to make credible assessments of security of supply.
The report says the Commerce Commission has far greater independence and the Electricity Commission's major functions could be done better by other Government agencies or industry processes.
Brownlee said there had to be some regulation of the electricity sector.
"We had self-governance arrangements between 1998 and 2003 and I would describe that as the Wild West period - we're not going back to that."
The ministerial working party would look also at rising power prices of the past five years and was due to report in the latter half of this year.
Electricity Commission chairman David Caygill rejected claims the organisation had crimped development, saying that in the past three years $2 billion of investments had been approved, nearly the doubling the value of the grid.
He said he was happy to see the commission reviewed.
