'Super board' tipped in power industry

By JAMES GARDINER

The long-awaited Government response to the electricity inquiry went before the cabinet yesterday, with details of the decisions expected this week.

The inquiry, chaired by former Labour deputy leader David Caygill, wanted a largely industry-based solution and appears to have got its wish.

A so-called "super board," chaired by Mr Caygill, is expected to govern the industry. Legislation will be passed to enable the Commerce Commission to regulate network companies, such as Vector and United, if the board believes they are exploiting their monopoly positions.

The Greens are concerned about non-wasteful uses of natural resources - in other words not spilling water from the hydro stations - and minimising pollution from thermal power stations.

It is believed a monitoring group will have a role in overseeing the board's performance on matters other than just the industry's impact on the environment.

The issue of consumer protections - or lack of them - has troubled some Alliance MPs but the caucus has chosen to support the package, which has little resemblance to the Alliance energy policy.

Power disruptions in the North Island have raised issues of how well systems are being maintained and how well network companies are staffed to repair storm damage.

The possibility of a shortage in Auckland this summer will test the competitive generation model's ability to offer supply security and fair pricing.

Longer term, the challenge will be to get power stations built in time to prevent national shortages.