Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Gas Sector Discussion Paper Released

Energy Minister Pete Hodgson today released a discussion paper on the state of the New Zealand gas sector.

ACIL Consulting was appointed to examine whether the gas sector is meeting the Government’s objective that natural gas is delivered to users in an efficient, fair, reliable and sustainable manner.

The report reviews the current regulatory regime for gas companies in the light of its findings.

The consultancy found that the gas wholesale market, although adequate for the present, will be less suitable in the future as the Maui gas field declines.

It also concluded that there may be monopoly pricing in gas transmission and distribution.

“An efficient gas sector is important for the New Zealand economy” Mr Hodgson said. “This paper is intended to provoke informed comment from New Zealanders on issues concerning the gas industry, to help the Government consider what action it might take”.

Submissions on the gas review are due by 31 January 2002, with an opportunity for cross submissions by 22 February 2002. Submissions will be posted on the Ministry of Economic Development website.

Mr Hodgson said the Government had not formed any views on ACIL’s findings. The release of the report did not imply Government agreement or disagreement with its conclusions.

A summary of ACIL’s findings is attached.

The ACIL report is available on the Ministry of Economic Development website at: www.med.govt.nz.

ACIL conclusions

 ACIL concludes that there may be monopoly pricing in transmission and distribution and proposes enhancements to the existing regulatory regime that will allow more definite conclusions to be reached on this in the next few years.

 ACIL also notes that historical circumstances (reliance on Maui, close involvement in development of the gas market by the government in the 1970s and early 1980s) have resulted in a wholesale market that has been adequate but will be less suitable in the future as the Maui gas field declines. New arrangements for gas wholesaling will therefore be needed and the industry should be encouraged to develop these.

 The short term measures proposed by ACIL to address monopoly power are:

 information disclosure should be enhanced to include data on retail switching rates;
 current information disclosure on gas transmission and distribution should continue;
 asset valuation could continue to be based on Optimised Deprival Valuation (ODV), but the methodology for calculation of asset valuation should be mandated and a one-off independent exercise undertaken to ensure the asset valuation is valid;
 the Government could encourage the Natural Gas Corporation (NGC) to separate its transmission activity into a separate legal entity, accompanied by ownership restructuring along the lines undertaken by NGC’s Australian parent company;
 a review of NGC’s approach to transmission pricing and measures to provide for gas injection at various points and capacity rights reservations could be encouraged; and
 the Government should encourage industry participants to set up a voluntary industry body to address technical issues relating to competition.
 ACIL suggests that the Government could encourage participants to renegotiate the Maui contract, to address the current lack of access to the Maui pipeline for transporting non-Maui gas.

 ACIL concluded that there are technical reasons for hydro spill and there is unlikely to be an economic incentive to burn gas in preference to hydro.

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Peters/Ardern Triumph

There are a lot of good reasons to feel joyful about this outcome. It is what so many young voters – the best hope for the country’s future – wanted.

Far more important than the implications for the Economy Gods ( is the dollar up or down? ) last night’s outcome will also mean many, many vulnerable New Zealanders will have a better life over the next three years at least.

Yet the desire for change was in the majority, across the country..>>>More


Reaction

Labour on its agreement |Peters: Post-Election Announcement Speech | Greenpeace “cautiously hopeful” about new Government | ACT - Madman on the loose | E tū ecstatic | Chamber welcomes the outcome | Greens on their joining Govt | EDS welcomes new govt | Immigrant groups worry | Feds ready to engage new coalition government | Labour Ministers of the Crown announced

 

Climate: Increasing Greenhouse Emissions Hit NZ

New Zealand is seeing impacts of excess greenhouse gas emissions in our climate and oceans, according to the latest national report from the Ministry for the Environment and Stats NZ about the state of the atmosphere and climate…More>>

ALSO:


Wellington.Scoop: Arrests At Blockade Of "Weapons Expo"

“We encourage people in Wellington to get down to the Westpac Stadium now for a day of awesome peace action. There will be plenty of food, music and activities to keep us sustained through the day.” More>>

ALSO:

Rorschach Restructuring: PSA Taking Inland Revenue To Court Over Psychometrics

The Public Service Association will be seeing Inland Revenue in Employment Court over its intention to psychometrically test employees reapplying for their roles at the department as part of its controversial Business Transformation restructuring plan. More>>

ALSO:

Nuclear Disarmament: Nobel Peace Prize 2017 Awarded To ICAN

Congratulations from iCAN Aotearoa New Zealand to international iCAN, the other iCAN national campaigns and partner organisations, and the countless organisations and individuals who have worked so hard for a nuclear weapons-free world since 1945. More>>

ALSO:

Expenses: Waikato DHB CEO Resigns

An independent inquiry has identified that Dr Murray had spent more than the agreed $25K allocated for relocation costs, and other unauthorized expenses involving potential financial breaches of the chief executive’s obligations. More>>

ALSO:

Wellington.Scoop: Sad About The Trolley Buses?

The Regional Council’s MetLink is today spending money to tell us that it really loves Wellington’s trolley buses, even though they’re all being taken off our roads by the end of this month. More>>

ALSO:

Post-Election: Preliminary Coalition Talks Begin

New Zealand First will hold post-election preliminary discussions in Wellington with the National Party tomorrow morning and the Labour Party tomorrow afternoon. More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election