More competition needed in electricity sector

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More competition needed in electricity sector


Commerce Commission findings show more competition is needed in the electricity market, says Business NZ.

The Commission’s investigation into power company actions during 2001 – 2007 has found no breach of the Commerce Act.

Business NZ Chief Executive Phil O’Reilly says there was never any expectation of a finding that power companies had used their market power in an anticompetitive way.

“But the fact that the ability and incentive to unilaterally exercise market power exists points to a lack of competition.

“Reform of the sector is needed, as advocated in the Business NZ analysis Regulation & Governance of the Electricity Sector published earlier this year.

“The Government Policy Statement on the Electricity Commission released earlier this month and the current Ministerial review on electricity governance show the Government is taking a serious look at reform. Let’s get on with this – business and consumers are waiting.

“A key outcome that we would like to see from this is a solution that delivers sustained downward pressure on electricity prices,” Mr O’Reilly said.

“Better governance arrangements and smarter regulation should result in more competitive outcomes.”