Electricorp chief attacks grid idea

Press, 31 August 1989, Page 7

Electricorp chief attacks grid idea

By

NIGEL MALTHUS

A suggestion that electricity retailers take over New Zealand’s national grid has been attacked as “totally premature” by the chief executive of the Electricity Corporation, Dr Rod Deane.

The suggestion has yet to be publicly floated, but is part of a proposal for restructuring the electricity industry which will be released by the Electricity Supply Association tomorrow.

Dr Deane pre-empted the announcement with a statement yesterday that it was totally premature for the E.S.A. to consider a take-over of TransPower, the Electricorp subsidiary which runs the grid. The future ownership of Trans Power, and indeed of the supply authorities, was a matter for the Government to decide, he said.

As far as Electricorp was concerned, TransPower was not for sale until such time as the Government decided it would be appropriate for other shareholders to take part.

Dr Deane said it was ironic and not very sensible that one set of natural monopolies was keen to acquire the only other natural monopoly in the electricity industry.

The E.S.A.’s director of administration and finance, Mr Peter Rutledge, confirmed that the E.S.A. had laid a pro-

posal with the Government, indicating it was interested in making a bid for Trans Power. “We certainly do not agree with Dr Deane, that it’s premature. It’s well researched and prepared.” The proposal addressed the questions of finance, and how a transmission system controlled by retailers would be run. It was in keeping with the tenor of advice by the consultants to the Government’s electricity task force, said Mr Rutledge. The proposal is included in a document entitled “A Better Deal for

the Power Consumer,” to be released in Wellington tomorrow, detailing the E.S.A.’s views on how the electricity industry should be restructured.

The E.S.A. has previously called for greater competition at the generation level, with Electricorp Production broken up into at least three competing companies, while saying that the national grid should stay in public ownership. The task force, which included E.S.A. and Electricorp representation, has made its still-confidential recommendations to the Government. Dr Deane said its recommendation on the ownership of Trans Power, with which the E.S.A. representatives concurred, was not the same as the E.S.A. take-over now being proposed.

He said that similar proposals — area power boards taking over the transmission grid — were part of the British privatisation programme, but led to delays and complications.

The task force had been aware of the difficulties and had tried to avoid repeating the British experience, Dr Deane said.