11 Dec 2009

Electricity reform bill due to be introduced

6:53 am on 11 December 2009

The Government is introducing a bill to Parliament on Thursday to restructure the electricity industry.

Proposals include redistributing the assets of big state-owned power companies and compensating customers for having to reduce their power usage during shortages.

Meridian Energy will have to pass two hydro power stations at Tekapo to Genesis Energy. In return, it will pick up the diesel-fired Whirinaki power station.

Whirinaki is currently operated by Contact Energy. It is owned by the Crown.

Energy Minister Gerry Brownlee says he is confident the changes will prevent electricity prices increasing as quickly as they have in the past.

He says competition will be improved through customers being able to switch suppliers quickly and easily.

Business New Zealand has welcomed the changes, describing them as a major step forward.

Chief executive Phil O'Reilly says ongoing price increases and uncertain

electricity supply have been issues for business for years.

The Employer and Manufacturers Association is also optimistic that businesses will benefit.

Comment by Minister

Mr Brownlee told Morning Report that more competition should introduce stability and what he called a much flatter price path.