ECNZ ANNUAL REPORT

Rt Hon W F Birch
Treasurer and Minister of Finance
Hon Tony Ryall
Minister for State Owned Enterprises

ECNZ Shareholding Ministers, Bill Birch and Tony Ryall have welcomed ECNZ's assessment that electricity reforms will mean lower electricity prices.

"In releasing its 1998 annual report, ECNZ has acknowledged that electricity generation will become more competitive in the future."

The Ministers said that despite some initial resistance to being split into three, ECNZ has always fundamentally supported moves to encourage competition on electricity.

Work on the split of ECNZ is progressing with three Interim Development Groups already at work and due to report to the Government on progress on 1 December 1998.

The Electricity Reform Transition Unit has also reported to the Government that a three way split of ECNZ will meet the Government's objectives of a more competitive electricity generation market. The Unit reported that the three new SOEs (Waikato, Huntly, South Island) will be viable companies requiring no additional funding.

ECNZ Shareholding Ministers recently reported that the split will reduce the wholesale price of electricity and bring savings of at least $150m a year to households and businesses.

The Ministers said ECNZ's concerns about the impact of the split on environmental and security of supply issues are being addressed by the Electricity Reform Transition Unit in its next workphase, the Interim Development Groups, government officials and the industry.

"At the time of the in-principle decision to split ECNZ, the Government was satisfied that the split would not threaten the environment or security of supply."

A decision on whether the split will proceed is due on 15 December 1998.