ESANZ STATEMENTS "EXTRAORDINARY" - BRADFORD

Energy Minister Max Bradford today rejected the "extraordinary statements" made by the Electricity Supply Association of New Zealand (ESANZ) following the introduction of the Government's electricity reforms.

The Electricity Industry Reform Bill was introduced into Parliament today, and will be referred to a Select Committee for five weeks.

"As has happened with each bout of reform in the electricity industry, ESANZ's comments have a distinct smell of vested interest about them," Mr Bradford said.

"ESANZ has indicated a commitment to the introduction of competition to the industry. Yet at the moment when the Government recommends measures to introduce reforms that will deliver sustained competition there is a howl of outrage.

"The Government's proposal for the ownership separation of lines and energy activities of power companies is not new here, or abroad. Indeed, a number of other countries are moving in this direction because of the failure of the highly regulatory measures that ESANZ, and now the Labour Party, are promoting."

Mr Bradford said that only last week the Electricity Regulator in the United Kingdom had recommended ownership separation so that true competition can develop in that market. The same is happening in the United States, he said.

"The argument also being promoted by some power companies that the Government's measures 'amount to confiscation of private assets' are little more than an emotional argument in service of their protected interests," Mr Bradford said.

"If the companies genuinely believe in competition, for the benefit of consumers, they will embrace these reforms as have consumer groups like the Consumers' Institute.

"Under the Government's reform, local communities that wish to retain ownership of their power company can continue to do so. The only difference is there must be two trusts owning each type of business.

"Only ownership separation breaks the incentives of monopoly line businesses to restrict competition to protect their own retailing business, and that goes for whatever ownership structure is in place."

Mr Bradford said the electricity reforms are about getting a better deal for all consumers, especially household consumers.

"We want competition to delver price reduction like those we saw when Challenge! entered the petrol industry recently.

"The Government's reforms give competition a real chance. They will deliver choice and lower electricity prices. Some experts are talking about a 10-15 per cent fall in electricity prices to consumers.

"In this way the Government is also seeking to improve New Zealand's international competitiveness by significantly lowering energy costs for business."