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No Price Controls for Retail Companies: Bradford

Hon Max Bradford
Minister for Enterprise and Commerce

MEDIA RELEASE
July 12, 1999

No Price Controls for Retail Companies: Bradford

ACT energy spokesman Owen Jennings has again shown his ignorance of the energy reforms by claiming a select committee report has recommended price control measures be extended to electricity retail companies, Enterprise and Commerce Minister Max Bradford says.

"The Government will not be extending the price control regime planned for lines companies to retail companies.

"Neither does the select committee, in spite of what Mr Jennings or those in the media are saying. The committee made the very clear statement that:"we do not favour price controls on generation or retailing".

"The Government will be considering the committee's recommendations and I will be making an announcement in the next day or two on recommendations it can and will support," Mr Bradford said.

Mr Bradford said Mr Jennings' and ACT's hands-off stance would leave monopoly lines companies free to overcharge retail companies and hence consumers if it were not challenged.

"Unlike ACT, this Government believes controls are needed to rein in clear monopolies and ensure that true competition in the retail sector can deliver lower prices to householders.

"On March 24 last year Mr Jennings unveiled ACT's own electricity reform package, which included among other things:

"The separation of line and energy businesses;

"The introduction of a robust disclosure regime including light-handed regulation on the entire lines business;

"In addition, ACT called for: " A CPI minus one per cent revenue cap for five years on the lines businesses, including Transpower, using the lines companies April 1998 prices as a starting point".

Mr Bradford said it was sheer hypocrisy for ACT to now oppose the kind of measures it had so strongly supported a year before.

ends

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