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Five Organisations Gave Evidence On Need for Lines

Hon Max Bradford
Minister for Enterprise and Commerce

MEDIA RELEASE
August 4, 1999

Five Organisations Gave Evidence On Need for Lines Control

Helen Clark cannot escape the fact that five organisations provided evidence to Parliament that controls over some monopoly lines companies were needed, Enterprise and Commerce Minister Max Bradford said today.

"Yesterday Ms Clark said there was no evidence that lines companies were responsible for power price increases.

"In doing so she chose to ignore the fact that the Consumers Institute, Comalco, the Major Electricity Users Group, the Consumer Coalition on Energy and electricity retailer TransAlta told a parliamentary select committee this year that price or revenue controls were needed to protect consumers.

"Labour justified its pro-monopoly stance by saying it had been assured that lines companies covering 90 per cent of consumers had agreed to freeze prices until July 2000.

"In siding with the lines companies, Labour was allowing many of these firms to lock in excessive charges," 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 of 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.

"After showing abject disregard for the interests of consumers, Ms Clark now has the gall to call for an inquiry into power prices, when she knows Labour is the main reason an inquiry is not under way," Mr Bradford said.

"The Bill which Labour will not support would have empowered the Commerce Commission to investigate electricity lines company charges.

"Whichever way Ms Clark wriggles, it is clear Labour has sided with monopolies while the Government has sided with consumers," Mr Bradford said.

ENDS

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