Ministerial Foreward
"A Better Deal for Electricity Consumers"
An efficient electricity system is vital for a competitive, growing economy.
The Government's electricity reform package is comprehensive and far-reaching. It establishes a framework that will deliver benefits to consumers, the economy and the environment over the next 20 years.
The Government's overall energy policy objective is to ensure that:
- Electricity is available when required by consumers,
- Electricity is produced at the lowest possible cost to the economy as a whole; and
- Harm to the environment is minimised
The best way to achieve this is through vigorous competition wherever possible, combined with an effective regulatory regime where competition is not possible, most notably in the transmission and distribution (lines) businesses.
The current industry structure has significant limitations. In particular, the dominance of ECNZ (around 70% of the wholesale market) keeps prices too high and encourages over-investment in new generation. Vertical integration of distribution lines and retailing restricts consumer choice of suppliers.
The changes set out in this document are expected to result in:
- More competitive prices for consumers;
- Choice of electricity suppliers for smaller consumers;
- Reduced operating costs;
- Better timed investment in new generation; and
- Less harm to the environment.
Most importantly, the package will deliver a better deal for consumers over the medium term.
This document sets out the key details of the reform package. It is intended to be a point of reference for industry participants, interested parties and the media. However, it is not a legal document, nor does it address the wide range of technical questions which are likely to be raised. Further information on these issues will be provided during the implementation process.
Rt. Hon Bill Birch
Minister of Finance | Hon Max Bradford
Minister of Energy |
| For and on behalf of shareholding Ministers |