No Retail Electricity Market Competition Reports Before Polling Day
November 5th, 2008
Electricity companies need not have worried about long-awaited Govt reports into retail electricity competition being rushed out ahead of the election. There was a lot of heavy breathing about the possibility last month, when Contact Energy announced 10-12% tariff increases for customers south of the Cook Strait cable transmission constraint, which has changed the cost structure for South Island electricity retailers and made power prices an early election campaign issue.
While the Commerce Commission still expects to be releasing its long-awaited report shortly after the election, it is waiting on input from an international expert first. This is one hurdle out of the way. For power company bosses worried by the potential for Contact’s blunders to encourage a new age of regulation for NZ’s lightly regulated electricity sector, the next hurdle is the election.
While a National-led administration is still the more likely outcome, there are credible scenarios for a Labour combination to sneak through. If this happens, expect Helen Clark to release the regulatory hounds on the retail electricity market.
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