Total Metering - Alcatel launch

Alcatel Lower Hutt

Mr Tolley (Total Metering Chairman), Mr Borren (Alcatel General Manager), Mr Chignell (Power NZ Business Development Manager), ladies and gentlemen

I'm delighted to be here today to help you launch this exciting new development in electricity metering technology.

This type of technology is a key element in the Coalition Government's (April 7) electricity reform package. The reforms are designed to deliver real choice and a better deal to all electricity consumers - ordinary householders, small and large businesses.

The reforms began in the late 1980s - but for the most part they have not completed the process of establishing a truly sustainable, competitive electricity market which ensures householders are getting a good deal and that in the business sector our internationally competitive position isn't eroded.

Electricity - because it contributes so much to the costs of business - has to be regarded as an export industry. Our electricity prices have risen above that of some of our trading partners - so if we're to equip New Zealand industry with the ability to remain competitive, the reforms must be completed. This is what the April 7 package proposes.

When we were working on the package, it became quite clear that there's a huge division within the industry about what needs to be done. The generators, most of whom are owned by the Government, told us: "The problem isn't us - the problem is at the retail end of the market." And they're right.

We asked the same question of the power companies and they said: "well, actually the problem isn't us - we're efficient. The problem is ECNZ, the dominant generator telling the market what to do and what not to do, extorting monopoly rents by their dominant position in the marketplace. Minister fix them up and everything will come right." And they were right too.

So we took a rational look at both ends of the market and concluded that both the generation end and the retail end were right. The problem is at both ends - and we're fixing both of them at once.

The reform package will therefore:

split ECNZ into three competing SOEs in order to create real competition at the generation end;
separate power companies into "retail" (selling electricity) and "lines" (the monopoly poles and wires part of most power companies) in order to create real competition at the retail end.
It is interesting to look at what other countries are also doing. For example, the UK regulator - who the last time I saw him in London last year was tearing his hair out trying to make a regulatory regime work - has recently concluded that complete ownership separation in the UK industry is desirable. So quite by accident we happen to arrive at the same conclusion here in New Zealand.

All consumers want and deserve a better deal from their electricity company. But they won?t get this without choice, and they won't get choice without competition. We have seen the benefits of competition in petroleum and telecommunication markets.

I want the same benefits for electricity consumers - the 10-15 per cent price fall that some experts are telling us the Government's reform package will deliver, employment growth, and New Zealand?s international competitiveness increased.

Retail competition cannot occur without a way to accurately assess electricity consumption, and provide the mechanism for low cost data management and reconciliation to support consumer choice. I am therefore delighted at the progress made by Total Metering Limited and Alcatel in developing the technology we're here to launch today.

And I'm confident the day is just around the corner when consumers will take it for granted that choice is in their hands - choice of supplier and choice of time to use electricity, be it the dishwasher or manufacturing machinery. The information to make those choices will be displayed in the home kitchen, on your TV screen, through a businesses computer system, or simply by dialling the phone.