Power watchdog head paid $300,000

By RUTH BERRY

The $300,000 salary for the head of the Government's new Electricity Commission has been attacked by National as evidence that the organisation is shaping up as an unnecessarily large bureaucracy.

Energy Minister Pete Hodgson announced details of the commission's membership yesterday, along with a revised policy statement on electricity governance.

The commission would be the chief regulatory agency for the industry and had been given a clear agenda to improve the security of electricity supply, he said.

The commission's six-member board will be headed by American Roy Hemmingway and will be supported by a staff of 20 by February.

Its annual operating costs are expected to be $6 million, to be met by a levy on the wholesale electricity market, Mr Hodgson said.

National Energy spokesman Gerry Brownlee said the commission was much bigger than expected when the Government flagged plans for its establishment in May.

"The initial idea was that this was going to be a body that looked at reserve generation, but its brief is now much wider than that."

Mr Brownlee said Mr Hemmingway's salary made it clear how significant a player the commission was set to be.

"It is, to say the least, impressive. It signifies the size of the organisation that is going to develop under his leadership. People are going to learn very quickly how powerful this new group is going to be."

There was no need to set up another sizeable bureaucracy in the sector, which would simply increase, not decrease, the cost of electricity to consumers, he said.

Electricity shortages for two years running prompted the decision to set up the commission.

Announcing Mr Hemmingway's appointment, Mr Hodgson said he had had extensive experience in regulatory management of electricity and other private utilities in the United States.

His three-year appointment was for a full-time job for which he would get an annual fee of $300,000.

Mr Hodgson defended the fee, saying it was comparable to those paid to the chair of the Commerce Commission and the Telecommunications Commissioner.

The five board members would receive $1000 a day and were likely to initially work an average of two days a week, expected to reduce over time.

The five members are: former Transpower director David Close, energy consultant Douglas Dell, former economic adviser to Finance Minister Michael Cullen, Peter Harris, professional engineer Graham Pinnell and lawyer and energy consultant Christine Southey.