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Electricity review will be a compromise

Bill English
Opposition Finance Spokesperson
Monday 12 June 2000

The Government's Electricity Review has produced a muddled, half-way house that will satisfy neither consumers nor the industry, National Finance spokesperson Bill English said this evening.

"A face-saving 'third way' of self-regulation with a light threat of price control if line companies do not co-operate is recommended in the report to be released tomorrow.

"The Government has a pattern of raising consumer expectations and creating uncertainty for business - especially when it comes to decision time when they dither. The recommendations that Pete Hodgson now has before him provide the Government with a temptation to repeat the same old pattern.

"Labour last year voted against National's price control legislation. But the review panel has heard many submissions calling for price control and the politically savvy David Caygill, chairing the review, will opt for a compromise.

"The Caygill committee has recommended that the industry regulate itself through a new governing body that will have no statutory powers. Instead, the State-owned lines monopoly Transpower will act as a benchmark for the industry and all monopoly networks will be revalued in a one-off exercise.

"If it follows the recommendation of no direct regulation, the Government will have no specific measures to deliver the lower prices that it promised consumers.

"The electricity industry is notorious for disagreement between generators, Transpower, retailers and local lines companies. In that environment, consumers will wait a long time to see any benefits from the review's recommendations.

"I also believe David Caygill will recommend the establishment of an Electricity Ombudsman, more standards and disclosure requirements.

These measures will neither give the consumer nor the industry the confidence they need. They seem designed merely to give Labour the ammunition to say it has moderated National's reforms," Mr English said.


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