Caygill 'welcomes' review of Electricity Commission

Tuesday 24th February 2009

Electricity Commission chairman David Caygill is welcoming the review of electricity sector governance announced by Energy Minister Gerry Brownlee today - but wants it to be over quickly.

"The announcement is not a surprise," Caygill told the National Power Conference, speaking just hours after Brownlee told the same audience that he was close to forming a Ministerial working party on the issue, to be completed by the end of the year.

"I'm pleased this under way," said Caygill. "Uncertainty about regulations imposes costs. Uncertainty about institutional structure is something that we need to try and minimise."

Brownlee's decision to use the LECG report, commissioned for Business New Zealand and released the day before the annual industry talkfest, was sensible, said Caygill, but its conclusions should not be taken for granted.

"It asks the relevant questions. It doesn't necessarily answer them as I or any of us here individually might," he said.

Caygill blamed much of the ongoing criticism of electricity market arrangements on the system of issuing Government Policy Statements on energy.

"It's in the nature of the mechanism: the ease with which it can be changed."

GPS's had little more legal force than a press statement, yet changes to a GPS could have a major impact on the EC as regulator, and the sector as a whole.

In addition, the EC's governing legislation contained far too many statutory functions, outcomes, and functions.

"It's not surprising that people don't know what the Electricity Commission does," said Caygill.

Major Electricity Users Group executive director Ralph Matthes said that electricity market governance was less a part of the problem than a simple lack of competition in electricity provision.

By Pattrick Smellie, Businesswire.co.nz

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