RODNEY FARMERS STAND TO BENEFIT FROM LINE COMPANY CONTROLS

  • Dr Lockwood Smith
Internal Affairs

The Government introduced the Commerce (Controlled Goods or Services) Amendment Bill in Parliament yesterday to control electricity line companies taking advantage of their monopoly positions said Lockwood Smith, MP for Rodney.

Lockwood Smith has just returned to New Zealand after meetings in Paris and Budapest, Hungary, where he represented New Zealand as Trade Minister, and worked with Australian Trade Minister and Deputy Prime Minister Tim Fischer to argue against the introduction of trade restrictions against lamb exports to the United States.

"This step is good news for Rodney, particularly for those farmers who are receiving more than one invoice for electricity," said Dr Smith.

"The legislation will ensure that the benefits arising from other parts of the electricity reforms, such as the introduction of competition in electricity generation and retail, flows through to consumers in Rodney," said Lockwood Smith.

"I've seen the reports of farmers in Warkworth who have experienced over 200 percent increases in the cost of commercial lines. The Government believes these increases have occurred because the lines companies are 'natural monopolies', and are not subject to the discipline of competition.

"The new legislation gives the Commerce Commission the power to impose price and revenue caps on electricity line companies which are over charging consumers.

"The Labour Party has suggested that they want to extend the legislation to include retail companies. But this is totally unnecessary.

"The electricity reforms and deregulation have allowed competition into the retail sector and in my view, Government has no role regulating private enterprise in situations where companies are subject to the disciplines of open competition.

"I'd be reluctant to support any legislation along the lines of Labour's suggestion," Lockwood Smith concluded.