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Power Distributors Welcome Govt Investment Boost

Electricity Networks Association

Media Release

For Immediate Release

8 August 2006

Power Distributors Welcome Government’s Investment Boost

Electricity distributors have today welcomed the Government policy statements on infrastructure.

“What we’re had up until now is a system that forces electricity line charges down in real terms. But it’s at a time when New Zealand’s networks need significant investment to cope with load growth and to replace ageing systems. A rethink has been desperately needed and I congratulate the Energy and Commerce Ministers on their decisiveness,” says Electricity Networks Association Chair Warren Moyes. “The announcements apply to a spectrum of industries, and it’s refreshing to see the essential nature of infrastructure investment being prioritised.”

“We see in these statements a new emphasis on ensuring that transmission and distribution facilities provide levels of security appropriate for a modern economy.”

Warren Moyes is also pleased that the announcements come ahead of the forthcoming National Energy Strategy exercise.

“There are other reforms that can be addressed now that the focus has shifted towards development. These include the creation of a realistic appeal system that will enable shortcomings in regulatory decisions to be sorted out.”

The Government’s statement made under section 26 of the Commerce Act could also be of great significance to the lines industry, the Association believes.

“While the Commerce Commission is normally tasked only to ‘have regard to’ such statements, the regulation of lines companies under Part 4A of the Act was a subsequent add-on, with many parallels with the regime handled by the Electricity Commission.

“I would expect the Commerce Commission to treat this Policy Statement in the same way that the Electricity Commission does, as a directive rather than a series of matters to be taken into account. Provision exists for the future transfer of the Part 4A work from the Commerce to the Electricity Commission. It would be anomalous if the Government Policy Statement had less bearing for one agency than it did for the other.”

“Overall, we applaud the Government’s call for a better regulatory environment, which will help provide the incentives and stability required to encourage investment in this critical infrastructure.”


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