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Govt still fiddling while elderly still freeze

Government still fiddling while elderly still freeze

Auckland – The Auckland Energy Consumer Trust has reiterated its calls for the government to review current laws that prevent electricity network owners like the AECT from investing significantly in the electricity generation industry.

AECT chair Karen Sherry said the government continues to fiddle around with short-term measures to resolve an electricity crisis that requires a long-term investment approach. The call for a legislative rethink comes as Age Concern says there has been an increase in the number of cases of older people too poor to afford proper heating or food.

The Executive Officer of Age Concern Otago, Susan Davidson, said the problem was increasing electricity prices, which are expected to go up by 18 to 20 percent next year.

Ms Sherry noted the government owns 68 percent, or nearly three quarters, of New Zealand’s generation assets and is obviously benefiting from high market prices. Its solution to a supply crisis has been to push up prices and force the elderly to turn their heaters off, a response that is not acceptable, she said.

“If the state-owned electricity generators are not doing enough to keep prices down then we say the government should change the current law and allow community energy trusts to consider doing so,” she said.

The AECT is New Zealand’s largest consumer trust, with $2.8 billion of electricity transmission assets around the country, but it is prevented by law from investing significantly in generation assets.

The Government allows lines company owners to own "reserve" generation without limit and "ordinary" generation up to 25 megawatts or 10% of load.

Ms Sherry said the Government should go further, and remove the ownership split in relation to generation.

“The lines/energy split has had a substantial and detrimental effect on investment in new generation facilities, especially on distributed generation. Prior to the lines/ energy split, integrated distribution companies commissioned the bulk of new generation capacity, a role that has not been fully taken up by the SOEs following the split,” she said.

The government is apparently concerned that because electricity networks, or lines companies, are monopolies, their ownership of generation assets as well would lead to price manipulation. Ms Sherry said such concerns were unwarranted, given the Commerce Commission’s policing of electricity network prices.

About the AECT

The Trust was created in 1993 and effectively controls and owns the share capital of VECTOR Limited.

The new VECTOR is now one of the largest network infrastructure companies in New Zealand with assets of around $2.8 billion. The Company distributes electricity and gas in the Auckland region and electricity in the Wellington region. VECTOR also operates ultra high-speed fibre optic networks in the Auckland and Wellington central business districts.

The Company is now also the largest electricity network company in the country. VECTOR owns the power lines in Auckland's North Shore, Rodney District, Waitakere City, Auckland City, Manukau City, Papakura District and Wellington and delivers power on behalf of energy retailers. VECTOR also distributes gas in the greater Auckland area.

Listed below are some facts you may find both interesting and useful: Total electricity consumers 618,565 Total gas consumers 65,743 Total Income Beneficiaries 281,223 Total Assets $2.8 billion Market share (consumers) – electricity 35% Market share (consumers) – gas 25% Electricity network 24, 638km Gas network 4,713km Telecommunications network 190km Annual revenue $0.5 billion

As the shareholder, the Trust receives the dividend from the Company’s profit. It’s our job to distribute it to our income beneficiaries, who are VECTOR’s customers residing in the former Auckland Electric Power Board area, and decide the formula for dividing that dividend between customers.

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