Call to restructure electricity industry

Press, 12 June 1984, Page 15

Call to restructure electricity industry

PA Wellington The electrical supply industry should be restructured by the establishment of publicly owned corporations to replace the present power boards and local body departments, the Planning Council’s chairman, Mr lan Douglas, has said. He told a senior management forum of the Electrical Supply Authorities’ Association that the shareholders of the power supply corporations would be the consumers of the areas they serviced, who would elect boards of directors and

would be entitled to receive dividends. “For the most part this would mean, initially at least, reconstitution of the existing authorities, but it would also provide a spur to amalgamation and rationalisation,” he said. “These public corporations would be required to achieve acceptable returns on the assets they employed. In other words, they would have to operate by the profit motive. They would be businesses and not social or political agencies.” Mr Douglas said that there was no reason why placing the emphasis on

market rates of return should result in increased power charges over all as improved efficiency in operation would offer the prospect of both better returns and lower prices. “It is, in fact, much more reasonable to assume that the dominance of market criteria in electricity supply would result in lower prices over all than those charged under the weight of nonmarket criteria,” he said. Mr Douglas said he would not favour exclusive territoriality. “The corporations should compete with one another,” he said.