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State-owned powercos not for sale

By Phil Boeyen, ShareChat Business News Editor

Tuesday 26th June 2001

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The Government has roundly trounced any speculation of further sales of state electricity assets.

Energy Minister Pete Hodgson says Trustpower (NZSE: TPW) has recently been reminding New Zealanders that much of the electricity industry in this country is publicly owned.

"That is true, and under this Government it will remain so."

"New Zealand taxpayers have invested billions of dollars in the national electricity infrastructure. Those assets will stay in taxpayers' hands as long as this Government is in office."

Both TrustPower and Natural Gas (NZSE: NCH), which owns the On Energy retail electricity business, have recently issued profit warnings because of the high prices they are having to pay for wholesale electricity.

Unlike On Energy, which has increased its retail prices, state-owned Meridian says it has no plans to raise its retail prices. Most of Meridian's generation capacity is in the South Island.

Peter Hodgson says those sectors in the electricity industry who are complaining about the level of state involvement seem to think New Zealanders would be happier if more electricity revenues were flowing to the private sector.

"I very much doubt that," he says.

"Claims that the state is profiting exclusively from current high wholesale prices are also flat wrong. Privately owned generators selling electricity on the spot market are also in a position to benefit from those prices."

Mr Hodgson says some industry players and commentators seem to believe the current electricity situation is a golden opportunity to push the case for further privatisation, but "they are barking up the wrong tree."

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