NISTER SAYS ENERGY MARKET MUST DELIVER GAINS TO CONSUMERS

``The government expects consumers to gain from the reforms of the energy sector and will judge the success of the reforms accordingly'', State Owned Enterprises Minister Jenny Shipley told the Electricity Industry Conference last night.

The Minister says the two key outcomes the Government wants to see are efficient prices and strong downward pressure on costs and prices, from strong competition between service providers.

And she reminded her audience that the 1995 Memorandum of Understanding which set up the electricity market signalled that further evolutionary steps may need to be considered.

``I say that not as a threat, but as a reminder of the stage we are at in achieving our goal.

``I would counsel all energy companies to make sure they share the gains from improved efficiencies and more sensitive wholesale pricing with their residential customers.

Mrs Shipley gave her personal observations on some aspects of the electricity reforms to date.

``Government is looking to see that five essential elements are being actively developed, so that the goals can be delivered on. They are: effective competition, an effective spot market and self-regulation, effective risk management, open access to grid and distribution lines, and real choice for ordinary residential consumers.

The Minister also commented on ECNZ's dominance, at around 70 per cent of the market, which continues to be a source of some real tension in the energy market.

``The Government has put in place a series of restraints to try to curb this dominance and we expect ECNZ to comply with these. We will continue to monitor the current impact ECNZ has on assisting the energy market to develop.

``The Government is looking to see that the essential elements of the market are being actively developed, so that our goals can be delivered on'', the Minister concluded.