Energy Commission promises higher prices

Gerry Brownlee National Energy Spokesperson
28 October 2003

Energy Commission promises higher prices for consumers The Electricity and Gas Industries Bill tabled today by Pete Hodgson means that consumers will be paying twice for reserve generation, says National Energy Spokesperson Gerry Brownlee.

"This bill will lock up the New Zealand energy industry in a very large bureaucracy, which will effectively cut the private sector out of the provision of generation.

"Worse still, the bill allows line companies to own reserve generation without limit. Line's companies are largely consumer trusts, whose wealth is accumulated from the distribution of electricity.

"Most have very strong balance sheets, and this is an attempt by the Government to have costly reserve generation which may operate only in one in 60 dry years paid for by consumers. This will affect the proposals to cap lines charges and mean a higher line charge component in consumer's bills on top of the electricity tax announced earlier this year.

"This legislation is a classic example of why regulation almost always leads to higher prices," Mr Brownlee said.

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