Letter to Christopher Russell, Chief Executive, The Marketplace Company
[ Last Updated 20 February 2006 ]
7 December 2001
Dear Mr Russell
As you know, the Government Policy Statement (GPS), issued in December 2000, sets out specific requirements for industry action, including a requirement that the Electricity Governance Board (EGB) develop rules in specified areas. The GPS also requires the Chair of the Electricity Governance Establishment Project to report to me every two months on progress in implementing the GPS.
I have been receiving regular reports on progress from EGEP. These reports have focussed on issues EGEP itself is progressing. However many aspects of the GPS fall outside the EGEP work stream. Work on most of the remaining issues is progressing in other fora, including that being co-ordinated by M-co.
My interest lies in outcomes, that is in ensuring work is progressing to meet the objectives contained in the guiding principles for the electricity industry as set out in the GPS. I am accordingly writing to the lead agency for each of the issues, which in this context includes yourself, seeking both co-operation with progressing them as soon as possible, and bi-monthly progress reports like those received from EGEP.
I understand that an issue in the GPS concerning disclosure of hedge prices is being progressed by M-co, in consultation with industry stakeholders.
I am looking for substantive progress now on this issue, given its importance to achieving the Government's overall objective for the electricity sector.
I am receiving a variety of ad hoc reports on progress with issues in the GPS, and in this context would like to thank you for your comprehensive letter of 12 November 2001 about progress with your work on collating and publishing information on prices for electricity contracts. However I would like to put this and other ad hoc briefings I get on to a more regular and co-ordinated arrangement.
It would be useful if your bi-monthly reports coincided with those from EGEP. I would therefore appreciate receiving your first report before Christmas, and subsequent reports every two months starting from the end of February 2002. It is important to me that the reports include specific forward looking timeframes and milestones. I propose that your reports and my replies (together with this letter) be made public as is the case with EGEP reports.
I believe that the market overall would have worked better during the past winter had some of the reforms specified in the GPS been fully implemented (such as disclosure of hedge prices). It is therefore important that measures that impact on winter security be implemented prior to next winter as a precaution against the possibility of entering next winter with low lake levels.
The attached table sets out the GPS issues, the lead agency for each and the specific issues I would like completed well before next winter. Some of the issues in the table associated with winter security have completion dates that are during or after the winter (such as transmission pricing and grid development). These dates reflect work programmes underway. I nevertheless expect good progress to have been made, and significant milestones to have been reached on these issues, by the beginning of winter.
I am asking all agencies to review their timetables for work they are leading on winter security issues. I would therefore appreciate your advice on the possibility of the work M-co is co-ordinating on disclosure of hedge prices being completed by the date specified in the table (31 March 2002).
Thank you for your consideration of my request for formal bi-monthly reporting on progress with issues in the GPS, and for your response to my request that work be completed well before the beginning of next winter.
Yours sincerely
Hon Pete Hodgson
Minister of Energy
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