Government Policy Statement sets agenda for new Electricity Commission

A revised Government Policy Statement on Electricity Governance sets out in detail the tasks of the new Electricity Commission.

The draft revised Government Policy Statement, released by Energy Minister Pete Hodgson today, reflects the Government's announcement in May of plans for the future of the electricity sector, including the Electricity Commission's responsibilities.

"The Electricity Commission will be the chief regulatory agency for New Zealand's electricity industry," Mr Hodgson said. "The Government Policy Statement sets a clear agenda for improvements that the Commission will be responsible for sheeting home over the next several years."

Mr Hodgson said the Commission's key tasks include: ensuring New Zealand's electricity supply is secure, with adequate reserve generation for dry years; establishing a decision-making process and transmission pricing methodology for investment in the national grid; and improving demand-side participation in the wholesale market and consumer protection measures, such as minimum terms and conditions for consumer contracts.

"The Commission also has vital work to do in improving modelling and forecasting of future electricity supply and demand, increasing disclosure of information from the industry to the wholesale market, and making demand-side energy exchanges available nationwide," Mr Hodgson said.

The first Government Policy Statement on the electricity industry was issued in December 2000. It was designed to guide an industry self-governance body, while the new statement reflects the establishment of the Electricity Commission. The revised statement is also explicitly linked to the Sustainable Development Programme of Action and the Growth and Innovation Framework.

Further information on the Government’s decisions on reserve generation is attached. These decisions on the detail of the arrangements follow consideration of comments on the discussion paper on reserve generation released on 20 May 2003. The key decisions are on the limit on the quantity of reserve energy and the trigger mechanism that will determine when it is made available.

The Government Policy Statement and further information will be available at www.med.govt.nz from Monday 15 September. Comments are sought by Friday 10 October.

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