Post-Winter Review of Electricity System - 10 September 2001
[ Last Updated 20 February 2006 ]
10 September 2001
Energy Minister Pete Hodgson today announced a review of the way New Zealand's electricity system functioned over the winter.
Cabinet today approved terms of reference for the review. It will be an open process of calling for submissions, posting them on a public website and inviting cross-submissions. A official summary of submissions will be prepared for Cabinet and posted on the website.
"Following the submission process I will invite Cabinet to make decisions on whether further changes are required to our electricity arrangements," Mr Hodgson said. "If there are changes to be made I intend to announce them before the end of the year."
Mr Hodgson said the response from New Zealanders to the Government's energy efficiency and conservation campaign over the past six weeks had been very encouraging.
"Voluntary power savings, temporary relaxation of transmission security and greater use of thermal generation have got us through a difficult period without supply interruptions. Despite record low inflows to the hydro lakes we can now be confident that the risk of a supply crisis has eased very significantly for this year.
"This winter's experience has been a potent reminder of New Zealand's heavy reliance on hydroelectricity and consequent vulnerability to dry years. It has been a punishing experience for some electricity retailers and large industrial consumers who were insufficiently hedged against the high wholesale market prices a dry year produces.
"A number of electricity consumers and industry participants are now asking whether the market works properly under dry-year supply pressure. I think it is timely and healthy for these questions to be asked, which is why I have arranged for this review."
Submissions and a brief background paper will be posted on the websiite (accessible from 13 September). Submissions are due by 5 October and further comments by 19 October.
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