Consumers threaten power walkout

By JAMES GARDINER

Business leaders and consumer groups are threatening to walk away from the Government-backed electricity industry working group, saying this winter's skyrocketing power prices and blackout threats must be analysed first.

But their attempts to convince power company representatives on the Electricity Governance Establishment Committee have failed: They were outvoted five to one.

And Energy Minister Pete Hodgson has refused to suspend the committee's work, putting his faith in the industry and former Labour cabinet minister David Caygill.

The consumer groups, representing major industry down to small household customers, want a halt now before the "flawed market model" is locked in.

Mr Hodgson agreed that reasons for the current situation should be reviewed once the prospect of blackouts has passed, but told the consumer groups on Monday that if the proposed rules did not work, his powers as minister to regulate would.

The big power companies, led by the three state-owned generators and Contact Energy, want to make their own rules for running power stations, networks and pricing.

The committee, chaired by Mr Caygill, has already spent the better part of $4 million of power consumers' money producing its proposal for the industry's operation.

But it will need approval from the Commerce Commission because the rules could amount to collusion between power companies.

With consumer groups now poised to object, the commission's approval is less likely.

It is understood that only Transpower, the state-owned National Grid operator, voted with the two consumer representatives when on the issue of whether to proceed with the rules a fortnight ago.

Mr Caygill and another power industry-appointed committee member, Richard Rowley, voted for the rules, along with Meridian Energy's chief executive Keith Turner, Contact Energy's Toby Stevenson, and Trustpower's Keith Tempest.

Up to 50 submissions objecting to the proposed rules were discounted.

The Consumer Coalition on Energy includes Business New Zealand (employers and manufacturers), Federated Farmers and major industrial users. It is fronted by David Russell of the Consumers' Institute.

In a letter to Mr Hodgson, sent last Friday, Mr Russell called for the establishment process to be suspended until the wholesale market's involvement in this winter's power crisis was fully reviewed.

Consumers did not want the "integration of a flawed market model in the proposed new rule-book", he said. They believed several retailers and line companies had similar reservations.

Mr Russell yesterday said industry representatives should not be allowed to dominate the governance structure as they did now. Consumers should have at least equal representation.

Business NZ chief executive Simon Carlaw called for a review of the wholesale market last week. Mr Carlaw said yesterday that he was still awaiting a written response from Mr Hodgson.

The Government relied on the Greens' backing to get the electricity bills - which provided for the governance board and the minister's regulatory powers - passed, and the Greens in turn put weight on Mr Hodgson's emphasis on a future of energy efficiency and use of renewable resources.

Meanwhile, figures show the country is still saving power, even though the crisis may be over.

Monday's savings reached 7.1 per cent, from 6.9 per cent on Sunday.

Electricity monitoring company spokesperson Jane Tronson said the country's hydro storage lakes were at about two-thirds of their operating levels.

Feature: Electricity

Energy Efficiency and Conservation Authority