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Report shows Govt part of power problem

Roger Sowry National Energy Spokesman

19 May 2004

Report shows Govt part of power problem

The Electricity Commission, the Government's so-called 'solution' to New Zealand's electricity concerns, is part of the problem, not the answer, says National's Energy spokesman, Roger Sowry.

The Government today released the first nationwide infrastructure stock-take. The report, written by PricewaterhouseCoopers for the Ministry of Economic Development, criticises the Electricity Commission. It states:

"There is a general concern over the lack of certainty around Government energy policy and the stability of the current regulatory regime.... Prior to the development of the Commission, the industry was moving towards a market-oriented design but under the Commission it is unclear what type of model will be developed... Ultimately, these uncertainties have the potential to further delay investment and impact on the cost of capital of the generators."

Mr Sowry says that though the Government thinks it is dealing with the electricity sector's problems, it is actually contributing to them.

"The Electricity Commission is creating uncertainty in the industry, and that is causing many would-be investors to shy away. "Without large-scale investment in electricity generation we will face a very real crisis. "The report says the Government's dithering over carbon tax is also fuelling concerns within the industry.

And it highlights the fact that the RMA and the Conservation Act are impeding appropriate responses to market issues. "Labour needs to wake up to the reality that power generation is under threat and it is time they did away with the deadweight Electricity Commission and scrapped their carbon tax plans," says Mr Sowry.

Ends

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