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Government decision on price control “ill-advised”

Thursday, July 28, 2005

Government decision on price control “ill-advised”

Powerco Chief Executive Steven Boulton says that he believes the Government’s decision to accept a Commerce Commission recommendation to impose price control on Vector and Powerco is ill-advised.

Mr Boulton said that Powerco was currently challenging the Commission’s recommendation through Judicial Review in the High Court.

“Powerco believes the Commission’s decision is legally flawed.

“If allowed to proceed, regulation will have a serious negative impact on both the energy sector and on the national economy,” said Mr Boulton.

“Many of the Government’s own energy objectives, and valuable opportunities to diversify New Zealand’s energy mix, are compromised by this recommendation. Further, the Minister’s decision is contrary to the advice of Treasury which recommended that price control not be applied, as there was not a sufficient economic case,” he said.

“We are disappointed that the Government has decided to support the Commission’s recommendation, particularly in view of the fact that that recommendation is presently the subject of a judicial review application.”

Mr Boulton said he would continue working on Powerco’s legal response and discussing the decision and its impact on Powerco in New Zealand with the relevant stakeholders.

ENDS

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