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Regulation Not The Answer

Regulation of the market is not the answer to alarming electricity price increases, says Business NZ.

Chief Executive Simon Carlaw says there is already too much state involvement in electricity.

"South Island price rises of between 50 and 85% are being led by the SOE Meridian. It's not clear that those price signals are valid - the costs of generation have not gone up and spot prices are not unreasonable at the moment. But those increased prices mean higher dividends to the Government which many will see as an example of state involvement distorting the market.

"This situation highlights problems in the current market structure. Generation capacity, competition issues and market dominance all need to be addressed. Rather than regulation, a more useful role for Government would be to fix the problems surrounding the Resource Management Act that are deterring the building of new generation plant."

Ends


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