Electricity price control inquiry - next stage

Media Release

13 November 2000/115

Electricity price control inquiry: Commission initiates next stage of work

The Commerce Commission has issued Requests for Proposals from consultants to assist it in preparing material on the substantive issues arising in its inquiry into price control for electricity line businesses. Early next year, the Commission is proposing to issue discussion papers on approaches to price control, and to the valuation of line business assets. The consultants' work will feed into the preparation of these papers. Commission Chair John Belgrave indicated that getting the consultancy work underway would be the next major step in the Commission's inquiry, which is being conducted under the current legislation. The Government recently announced its proposals for changing the legislation to give the Commission wider powers for implementing a price control regime for electricity line businesses. These changes to legislation are expected next year.

The Commission previously issued a paper outlining the issues it had preliminarily identified with price control of line businesses, and the process it proposed to use to deal with them.

"A range of comments have been made by the industry and other interested parties in submissions to the Commission on this preliminary paper. The comments, which have generally been supportive of the Commission's proposed approach, have been very helpful, and are being taken into account for the work now being initiated, and in planning the Commission's future work", said Mr Belgrave.

"It is proposed that the Commission will in due course build up its in-house capability in respect of electricity price control. In the meantime the use of external expertise is vital to get major work underway quickly.

"The Commission will, throughout its inquiry, be adopting as open and transparent process as possible. There will be close communication with industry and other parties to ensure that existing knowledge and information can be drawn on, and to allow the various parties to make their views known."

ENDS

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