Hon Max Bradford
Minister for Enterprise and Commerce

MEDIA RELEASE
August 4, 1999

Hodgson, Cullen Abandon Otago Consumers

Labour's energy spokesman Pete Hodgson and deputy leader Michael Cullen were prepared to see their own Dunedin constituents pay higher electricity prices while they played politics, Enterprise and Commerce Minister Max Bradford says.

Mr Bradford said today that the lines company in Dunedin declined to give Mr Hodgson a commitment it would freeze its prices before Labour decided not to support lines control legislation.

"Labour tried to justify its appalling decision to allow monopoly lines companies to continue overcharging by saying it had been given assurances that most lines companies would freeze charges until at least July 2000.

"As the Consumers' Institute and other organisations have said, this will only allow these companies to lock in excessive charges.

"Mr Hodgson and Dr Cullen were not only prepared to see consumers continuing to being overcharged, but they were also prepared to allow prices to be ramped up further in Dunedin," Mr Bradford said.

"An analysis of line companies across the country shows 29 per cent or 477,000 customers had to bear the brunt of an increase in the line charge component of their electricity bill in the period April 1998 to June 1999.

"A further 40 per cent or 661,000 customers had no change in lines charges in this period, despite their lines company reducing costs by selling the metering side to their business.

"So 69 per cent of New Zealand consumers are paying lines charges higher than they should be.

"The monopoly lines companies have simply pocketed the difference.

"The electricity lines control legislation would have empowered the Commerce Commission to cap the amount lines companies could charge and recover excessive charges for the benefit of consumers.

"Lines companies charging reasonable rates would not have been affected," Mr Bradford said.

ENDS

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