Orion Change Of Attitude Good, But Not Good Enough, Says Bradford

Orion's decision to freeze monopoly line charges to electricity retailers is in effect a determination to continue overcharging consumers, Enterprise and Commerce Minister Max Bradford says.

Mr Bradford said he suspected Orion's announcement had been prompted by the criticism it had faced for TransAlta's decision to raise power prices in Christchurch and by concern about the effect of promised Government price controls.

"It is all very well for Orion to freeze prices until 2002, but the simple fact is Orion has taken the opportunity of the power reforms to increase its own profits and not to pass on the benefits of lower costs to consumers," he said.

While many monoply lines companies were working to deliver a better deal to consumers, a small number had used the reforms to grab profits, he said.

Some lines companies have sold meters and transferred other costs to energy retailers, but have not reduced their prices to reflect the lower costs.

Some power retailers have been forced to increase their prices because of the failure of these monopoly lines companies to lower their charges.

If monopoly lines companies did not lower charges to retailers to reflect their lower costs they were grabbing profits at the expense of consumers.

The Government would regulate to stop this, Mr Bradford said. "It is intended the regulations will test the actions of monoply lines companies and may result in price and or revenue roll-backs, where these companies have been effectively overcharging.

"Having said this, I welcome the statements from Orion supporting the power reforms and that the company is engaging in a more co-operative frame of mind.

"Such statements were certainly not an expression I heard from Southpower (which became Orion) when the reforms were being discussed," Mr Bradford said.