The three-way split of ECNZ will proceed and be completed by the end of March next year securing lower electricity prices for N

The three-way split of ECNZ will proceed and be completed by the end of March next year securing lower electricity prices for New Zealand households and businesses and long-term benefits for the environment, ECNZ shareholding Ministers Rt Hon Bill Birch and Hon Tony Ryall said today.

"The split of ECNZ is a further step in the Government's plan to secure lower electricity prices for households and businesses," the Ministers said."The entry of ECNZ and Contact into the retail electricity market has already delivered benefits to consumers as much as a year ahead of expectation.

"The establishment of three new financially viable SOEs based around power stations in Waikato, Huntly and the South Island will provide further competition and downward pressure on electricity prices." The Ministers confirmed there will be no additional Government spending required to implement the split and there will be no write down in ECNZ's asset value in the Crown's books.

"Labour have opposed every step of the Government's electricity plans regardless of the clear and immediate benefits to consumers. They want to deprive New Zealanders of cheaper electricity." The final decision to proceed with the split follows the announcement by the Ministers on September 15 that three new SOEs would be established subject to satisfactory progress being made on environmental, Treaty of Waitangi, and security of supply issues.

The Ministers said today they are satisfied the split will produce long-term positive benefits for the environment, in particular less hydro spill waste and fewer CO2 emissions from thermal power stations.

They said Maori have been widely consulted and the three new SOEs will maintain relationships with local Maori groups. Mr Birch and Mr Ryall said competitive pressures on electricity generators will help to maintain hydro storage to meet electricity consumer demands in periods of low rainfall.

In a separate statement released today, the Minister for Enterprise and Commerce said the majority of electricity generators and retailers have accepted the responsibility for managing the risks relating to electricity supply. After the split on 1 April next year, ECNZ will become a residual unit to manage a range of issues including existing hedge contracts (forward purchases of electricity by power companies), existing debt and legal issues.

The Government today released reports from its advisors on the split, the Electricity Reform Transition Unit (ERTU), and the three Interim Development Groups (IDGs) establishing the SOEs. These reports reaffirm the viability and competitiveness of the new SOEs and report on the environmental impacts and 'dry year' risk of the split. ERTU's and the three IDG reports will be available on the Ministry of Commerce website after 2.00pm today. The address is http://www.moc.govt.nz Media inquiries:

CHAIRS FOR THE THREE NEW SOEs:

Hydro Energy Limited (South Island) is to be chaired by Dr Francis Small. Dr Small is the managing director of Tranz Rail. He holds both Masters and Doctoral degrees in engineering. Dr Small joined New Zealand Railways in 1964 and has been chief executive of New Zealand Rail and then Tranz Rail since 1990. He is on the boards of Wisconsin Central Transportation Company in the United States and of the Australian Transport Network. Dr Small is chairman of the Centre for Advanced Engineering in Christchurch and past president of the Institution of Professional Engineers.

Genesis Power Limited (Huntly Tongariro) is to be chaired by Keith Smith. Mr Smith was the chair of the Huntly IDG and is an experienced company director. He chairs The Warehouse Group Ltd and is a director of TV3 and Tourism Holdings Limited. Mr Smith is a partner in Spicer and Oppenhein Chartered Accountants and is president of the Institute of Chartered Accountants.

Waikato SOE Limited is to be chaired by Rob Challinor. Mr Challinor was the chair of the Waikato IDG and is a principal of Northington Partners, corporate advisers. Mr Challinor is a former director on the ECNZ board and was a member of the establishment board that formed Television New Zealand and Radio New Zealand. He is a director of National Insurance, Sheffield Consulting Group and Moana Fisheries.