Foreword
The electricity sector has a critical role to play in underpinning the Government's growth and sustainability objectives. Sustainable economic growth will best be supported by an electricity system that:
- Is reliable and resilient
- Is environmentally responsible
- Delivers energy prices that are efficient, fair, and as competitive as possible consistent with these requirements.
The Electricity Commission has a key role in contributing to these objectives. The Commission's principal objectives are to ensure that electricity is produced and delivered to all classes of consumers in an efficient, fair, reliable and environmentally sustainable manner and to promote and facilitate the efficient use of electricity.
Electricity security of supply is essential to all aspects of our personal and working lives. The Commission will work with all stakeholder groups to ensure that, as a country, we achieve an appropriate level of security for a modern society.
The Electricity Commission will have responsibility for governance and regulation of the industry. Key roles for the Commission include:
- Maintaining a regulatory environment that is conducive to investment in all types of generation and that minimises any undue barriers to competition in generation and retail
- Using reasonable endeavours to ensure the Government's security target (supply in a 1 in 60 dry year) is achieved
- Overseeing key decision-making processes to ensure that transmission makes a cost-effective contribution to security
- Working with the Commerce Commission to help ensure target security levels for distribution networks are met at least cost
- Developing arrangements to ensure fairness for consumers
- Working with EECA to promote the efficient provision and use of electricity, particularly at the consumer end, and
- Ensuring proper coordination across the supply chain, so that accountabilities and interfaces are clear and delivery of cost-effective solutions is facilitated.
A range of other factors, for which the Commission does not have accountability, will impact on the electricity sector through time. These include:
- Climate change policy
- The Resource Management Act 1991 and related processes
- Policy and regulatory settings for the gas sector, including measures to encourage petroleum exploration, and
- The National Energy Efficiency and Conservation Strategy.
The Government expects the Commission to take into account and contribute as appropriate to the Government's wider policy objectives.
The Government also expects the Commission to provide early warning if it believes there is any material risk that current settings for electricity and for other policy areas are unlikely to produce sufficient investment, particularly in generation and the national grid.
This Government Policy Statement sets out the objectives and outcomes the Government wants the Commission to give effect to. It is made pursuant to s 172ZK of the Electricity Act 1992 as amended by the Electricity Amendment Act 2004.1
Other related documents are the Sustainable Development Programme of Action,2 the National Energy Efficiency and Conservation Strategy,3 the Climate Change Work Programme4 and the Government Policy Statement on Gas.5
Hon Pete Hodgson
Minister of Energy
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