Power price prediction scare tactic—Minister

Press, 29 July 1986, Page 6

Power price prediction scare tactic—Minister

Predictions of electricity prices had no credibility, the Minister of Energy, Mr Tizard, said yesterday. Mr Tizard told the MidCanterbury Spray Irrigators Association that he had b£en disappointed to read claims by the Electrical Supply Authorities Association that electricity prices would jump 40 per cent next year. The E.S.A.A. had based its claim on plans by the Government to form an Electricity Corporation which would have to pay tax. Mr Tizard labelled the prediction as "sheer guesswork and scare tactics.” • “Future electricity prices have not yet been determined, and thus such predictions have no credibility. "The Government has so far only made certain decisions about electricity pricing in principle. The actual details are not yet finalised.”

He said people should treat such predictions with scepticism. With the introduction of a commercially orientated corporation on April 1, 1987, the Government would remove economic controls from the generation, transmission and distribution of electricity, he said. The distribution market would have to undergo substantial restructuring if industry-wide efficiency was to be achieved. The Government wanted local supply authorities to run on commercial principles. Although they would have to pay tax, supply authorities would be working in line with requirements that have been imposed on the private sector for many years, said Mr Tizard. Although the Electricity Corporation would have a near monopoly position in the market, the Commerce Act should provide enough control for the pricing of electricity, he

said. The Government could yet decide to bring in specific legislation because of the unique features of the electricity market. Mr Tizard said more competition in the distribution market was also being sought by the Government and the present licensing system would be reviewed. “It should be obvious that larger authorities, with greater opportunity for efficient load management, will be in a better position to negotiate tariff terms with the new Electricity Corporation. “I believe there is considerable scope in Canterbury for such industry reorganisation and it could bring quite substantial benefits to consumers,” he said.