Government power control 'would be disaster'

The National Party has accused the Government of planning to take control of the electricity industry and says the result would be disastrous.

Energy Minister Pete Hodgson announced this week that a board would be established to run the industry if companies could not agree on a structure to govern themselves.

He said national grid operator Transpower had decided to vote against the self-governance plan and Meridian Energy had indicated its opposition.

Companies in the industry are involved in a referendum to decide the issue and Mr Hodgson said the process would be allowed to run its course to mid-May.

He said the Cabinet had set aside funding to prepare for the establishment of a Crown Electricity Governance Board if the industry did not back the self-governance structure.

National's commerce spokesman, Tony Ryall, said yesterday that after years spent trying to get the industry to run itself, the Government was now trying to take control.

"This will be a disaster for New Zealand businesses, taxpayers and consumers," he said.

"What the Government should be doing is fixing the RMA [Resource Management Act] so more hydro schemes can be built, and encouraging more private sector investment and competition."

He claimed Mr Hodgson had been sidelined, and Prime Minister Helen Clark and Finance Minister Michael Cullen were now in charge.

Mr Ryall said they knew even less about electricity than Mr Hodgson and putting commercial and regulatory decisions in their hands would be irresponsible and would undermine investor confidence.

Mr Hodgson's announcement came as consumers were being urged to reduce electricity usage or face a possible winter shortage if hydro lake levels do not improve.

Mr Ryall said the Government's response to the situation had been useless.

"All New Zealanders have seen is the occasional press release saying the 5 per cent savings target has yet to be reached," he said.

"Where's a comprehensive campaign to save power? The Government had plenty to learn from the 2001 crisis but it failed to put any safeguards in place and is now carrying the results."

New Zealand First's energy spokesman, Peter Brown, said Mr Hodgson should accept that the present structure of the industry, with its emphasis on profit rather than supply, would never work in the national interest.

- NZPA