Business Needs Real Answers On Power Prices

Business New Zealand welcomes today's intervention by acting Energy Minister Paul Swain in calling an urgent meeting with business and industry over the electricity crisis.

"The problem of outrageous wholesale prices has been escalating for some time," said Business New Zealand Chief Executive Simon Carlaw, "and Mr Swain's involvement as Minister of Commerce is also appropriate.

"There is a critical need for a wider look at the causes of the problem than the recent inquiry by the electricity market's surveillance committee. Their conclusions reflected their narrow terms of reference. There remain major issues going well beyond supply and capacity across the sector. These include transmission constraints and the effectiveness of the market structure that allows cross-ownership of generation and supply companies.

"A Commerce Commission inquiry would be more wide-ranging and exhaustive. Price increases of 500 - 700% may or may not be evidence of a market operating as it should. The real question is whether the structure itself is sustainable.

"Businesses of all types across the country especially small businesses are entitled to urgent answers," Mr Carlaw said.

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