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.”