Sharechat Logo

Too many power companies says consultant

Friday 2nd February 2001

Text too small?
New Zealand's host of small power lines companies will begin to disappear now the industry has some regulatory certainty, according to Cap Gemini Ernst & Young (CGEY).

In its latest analysis of the sector CGEY says 29 lines companies is too high a figure for the size of the country.

Even those smaller companies that rate highly on efficiency would be more efficient still if they were larger.

A case in point was Electricity Invercargill, which ranks first in CGEY's performance analysis. It has 16,733 customers.

CGEY utilities consulting sector vice-president Govind Saha said it could find further efficiencies if it were three or four times larger.

Network charges last year fell 5% in real terms, Dr Saha said. Further falls were expected as the new information-disclosure regime encouraged companies to become more efficient.

Nearly all the firms had promised to freeze prices until August this year.

System reliability had improved across the sector and sector costs fell, in line with the trend of recent years, Dr Saha said.

The second, third and fourth rankings companies were also minnows - Network Tasman, Alpine Energy and Horizon Energy Distribution.

Among the big networks, United Networks (480,000 customers) came fifth and Orion (162,000) seventh. Vector (260,000) didn't make the top 10.

The government is considering industry regulation in the light of last year's Caygill report.

CGEY proposes a low-cost regulatory scheme based on a penalty-point system, rather than a "heavy-handed, high-cost system."

"The primary concern with the current system is the speed at which efficiencies are being delivered," Dr Saha said.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report