Media Statement

27 January 2000

Electricity statistics confirm need for inquiry

The latest electricity price statistics confirm the need for an inquiry into the electricity industry, the Minister of Energy, Pete Hodgson, said today.

“After adjusting for inflation, retail prices for small (500 kWh per month) domestic consumers rose 3.4% in the 18 months to August 1999. For larger domestic consumers (1,500 kWh per month), the increase was 2.6%.

“These statistics are based on charges set by ‘incumbent’ retailers. They do not include more recent increases in places such as Northland, South Auckland, North Wairarapa, Manawatu, Dunedin and Invercargill”, Mr Hodgson said.

“Over the same period, the statistics show that line charges imposed by electricity line companies fell 3.0% for small domestic consumers and 1.1% for large domestic consumers, although this was due largely to the removal of metering charges from the definition of line charges.

Mr Hodgson was commenting on the release of the Electricity Information Disclosure Statistics 1999 publication, prepared by the Ministry of Commerce.

“The publication summarises the line charges of each line owner, and the retail charges of each electricity retailer. It also brings together the annual performance measures and statistics for line businesses using information disclosed by the line companies under the disclosure regulations.

“The performance of line owners in meeting the information disclosure requirements for 1999 was unsatisfactory, according to the Ministry of Commerce. Many disclosures did not meet the publication deadline, or failed to comply with the detail of the regulations. Line owners will have to improve their disclosures this year”, Mr Hodgson said.

“The aggregate asset value of line businesses fell slightly to $4.3 billion in the year to 31 March 1999.

“The Ministry of Commerce has just released a discussion paper reviewing the rules for the valuation of line business assets. The valuation of line business assets is an important issue because it determines the acceptable level of profit for these monopoly businesses.
The government is determined to prevent companies inflating asset values to justify higher profits,” Mr Hodgson said.

This is the first year in which companies must publish their line charges and financial statements on the internet. A list of links is provided on the Ministry of Commerce website at http://www.moc.govt.nz/ers/inf_disc/linedisc.html.

Contact: Graeme Speden, press secretary 04 471 9707 or 025 270 9055

© Scoop Media