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Lack of leadership bedeviling electricity industry

Tuesday, June 13, 2006

Regulatory framework, lack of leadership, bedeviling electricity industry

The massive power and gas outages in Auckland yesterday exposed again the vulnerability of Auckland's power supply, but under the government's regulatory arrangements it is extremely hard to get things fixed, the chief executive of the Employers & Manufacturers Association (Northern) Alasdair Thompson says.

"Energy Minister David Parker doesn't seem to understand fully the obstacles to fixing Auckland's power supply," Mr Thompson said.

"When Prime Minister Helen Clark asked yesterday 'why is Auckland so dependent on one power line', it was plain the Energy Minister had not explained the problem to her.

"The root cause of the scale of the electricity outage is the consequence of under-investment in new transmission lines and sub stations over many years.

"Transpower has acknowledged the Otahuhu facility is 50 years old and though it has been maintained, is stretched to capacity and its technology is old. The same applies to a large part of our power supply network.

"Simply put we have an old fragile system fully loaded but Transpower needs extensive regulatory approvals before investing to rectify the situation. In addition the government has made the situation worse by its own actions and its regulatory framework.

"The Electricity Commission recently rejected the new 400 KV line from South Waikato to Auckland, which included investing in new technology at Otahuhu. The Electricity Commission's approach is not sufficiently risk averse to avoiding a repetition of such outages.

"The torch of public scrutiny should be shone on the government and its armchair critic regulator, the Electricity Commission as much as on Transpower."


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