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Decisions Reduce Electricity Industry Uncertainty

Commerce Commission Decisions Reduce Electricity Industry Uncertainty. BUT does not encourage investment in new electricity solutions.

"While the Energy Minister desperately wants more water to flow through the dams, the Commerce Commission realises that a lot more water needs to flow under the bridge before they can come to a useful position in regard to the regulation of pricing for electricity lines businesses" said Dom O'Sullivan, chairman of Energy Trusts of New Zealand, responding to the latest Commerce Commission announcement on a regime to force lines companies to reduce prices.

"ETNZ is pleased that the focus has shifted back to things that are important to customers - price and quality. But serious defects still remain."

"The Commerce Commission's draft regulatory scheme impacted seriously on the value of publicly listed line companies, but the final announced scheme, delaying implementation of the worst aspects, has returned a little more confidence to the market."

"The new regulations provide a mixed message to the owners of the line companies in New Zealand. Most lines companies are owned by community trusts, and the trustees are dedicated to working for their beneficiaries. We do not need imposed regulatory controls on the way we operate. Such controls threaten the implementation of much needed new investment in new electricity network and distributed generation solutions" said Mr O'Sullivan.

"The Commission's final decision has delayed implementation of the worst elements of their draft proposals and will allow more time for the design of the regulations to be reviewed."

"BUT the climate for investment remains cloudy, and a high level of ongoing uncertainty will prevail."

"On the one hand Government is urging Trusts to use the profits from lines companies for energy efficiency programmes to help stop the power shortage, and with the other hand they are telling the trusts that they are not to make any profit at all."

"ETNZ applauds the Commission's move to stop energy retailers absorbing price reductions made by line companies, but not passed on to the consumer by the energy retailer. Transparent pricing is essential to prevent this occurring, and ETNZ is pleased that the Commission will look at ways of stopping this behaviour of energy retailers"

"Many of the Trusts already return all of their profits to their beneficiaries - and the regulations just make it harder for the Trusts to undertake other community projects such as supporting energy efficiency projects so desired by the Energy Minister" concluded Mr O'Sullivan.

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