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Self-governance arrangements take a backward step

Self-governance arrangements in the electricity sector take a backward step

”The interests of the economy and end consumers of electricity have taken a backward step following today’s announcement that the Commerce Commission has decided to authorise the proposed new arrangements for the self-governance and operation of the electricity industry” according to Terrence Currie Chairman of the Major Electricity Users Group. Today’s authorisation covers the establishment of an Electricity Governance Board and its new rulebook.

He said “all consumers’ will be concerned that the Commission has done a complete turn around from its earlier draft decision where authorisation was not supported. Further more we are not privy to the Commission’s reassessment of the benefits and costs to the economy and will not have that information for several weeks. The imposition of four conditions by the Commission and its limit on the life of the authorisation do not, in our view, bridge the gap between the Commission’s draft determination that deemed the detriments of the arrangements outweighed the benefits.”

“This decision to authorise appears to be an enormous gamble on the part of the Commission but unfortunately it has placed the interests of consumers at risk.”
“Apart from the supply side of the industry, namely the generators and their retailing arms, there has been such widespread opposition to the proposed arrangements that one finds it difficult to understand how or why the Commission believes that net benefits will accrue to the public”, commented Mr Currie.

“MEUG and other end consumers have supported the principle of self-regulation as much as possible and have actively participated in the existing authorised arrangement for deciding common quality and security issues, ie the Multi-lateral Agreement on Common Quality Standards (MACQS). That arrangement has an appropriate balance of supplier and consumer interests and safeguards, whereas the rulebook proposed by the EGBL does not.”

Mr Currie concluded, “This saga is not over yet. At every stage we will be seeking to ensure the domination of the governance arrangements by existing suppliers is removed and that end consumers and suppliers that do not wish to be a part of such a biased rulebook will have the opportunity to buy and sell electricity through other arrangements.”

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