13 May, 2003
Power cartel running on empty

Green Party Co-Leader Jeanette Fitzsimons said she is not surprised at the impending failure of the electricity industry's self-governing board.

Energy minister Pete Hodgson is set to introduce a Crown Electricity Governance Board (CEGB) after the failure of the electricity industry to announce a self-governing regime by the end of this week.

"The electricity industry has had two years to develop a governance structure and despite having spent millions of dollars of electricity consumers' money on trying to write the rules they have nothing to show for it," said Ms Fitzsimons.

"The industry players have focussed on power games and competitive posturing while New Zealanders suffer cold showers and business shutdowns."

Ms Fitzsimons predicted two years ago that the self-governance plan, urged by the June 2000 Caygill Report into the electricity industry, was doomed to fail, when she said:

"A board chosen by the market participants and setting the pricing rules is effectively a cartel which will protect the interests of the current participants, and work against the consumers, small generators of renewable energy, and the environment.

"It's no secret that the Greens have major reservations about the industry self-governance model proposed for electricity. The board will inevitably be a club of people with vested interests. The parties not properly represented will be the consumer and the environment," said Ms Fitzsimons in 2000.

"Faced with a winter of cold showers, I think consumers would be really angry to know that power companies were wasting New Zealand's valuable resources just to keep their profit margins higher.

"The CEGB must sort the industry out in a way that reflects the public interest. It is a good opportunity to assist and encourage renewable energy sources and focus on reducing consumer demand. It must be made easier to trade in fixed-price wholesale contracts and for distribution generators to connect to the lines.

"New Zealand is one of the most inefficient power-consuming nations in the world. Any solution that does not focus on helping people reduce their demand is bound to be unsustainable."

ENDS

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