Govt launches review of electricity sector

Gerry Brownlee

Energy and Resources Minister Gerry Brownlee today launched a ministerial review into the electricity sector.

The announcement comes as homeowners face increasing power costs as winter looms - despite Government calls for restraint in power company pricing.

Mr Brownlee said the review would begin work immediately and release final recommendations to the Government in September.

"The government has concerns about security of supply, the affordability of electricity, and duplication of electricity sector governance."

He said the review would be done in two phases, the first looking at regulatory and governance issues and the second at electricity market performance issues.

Final Cabinet discussions and preparation of any legislation are expected to be completed by the end of 2009.

The review will not consider the ownership of SOEs or economic regulation of electricity lines as the Government's assumption was that there was still room for improvement within the current market approach.

Mr Brownlee said the review would bring together a number of reports into the sector already under way or completed.

"It may be that the review process throws up some obvious short term improvements that can be made and if so these will be acted on immediately," he said.

Mr Brownlee will lead the review with support from a technical advisory group and project team.

The six experts in the technical advisory group are: Senior fellow at the NZIE Brent Layton, consumer advocate and chairman of the Electricity Commission's Retail Market Advisory Group David Russell, Victoria University Professor of Economics Lewis Evans, Chapman Tripp consultant Stephen Franks, chairman of the Electricity Commission's Common Quality Advisory Group Toby Stevenson, and Miriam Dean QC.

The Project Team will be made up of officials from the Ministry of Economic Development and the Treasury.


Expected timeline of review:

March 2009 Appointment of Advisory Group and Project Team

April - May 2009 Evaluation of options, liaison with Minister(s)

June 2009 Cabinet approves early implementation options and then separate fast track process (including Legislation if required)

June 2009 Cabinet approval to release discussion paper

July 2009 Public consultation on discussion paper

August-September 2009 Analysis of submissions, development of final recommendations

October 2009 Cabinet agreement

November 2009 - January 2010 Preparation of legislation

February 2010 Legislation introduced

March 2010 - May 2010 Select Committee

June 2010 Introduction of changes


Electricity prices going up

Genesis Energy: 2.8 per cent electricity price rise for Auckland customers in Vector lines area, 3.8 per cent in northern Waikato.

Contact Energy: 13.5c a day increase for gas customers. Electricity prices remain unchanged.

Meridian: 6.5 per cent average electricity price increase nationwide.

Mercury Energy: 3.9 per cent electricity price increase in north and west Auckland.

- NZHERALD STAFF