NGC Responds to MSC Report

July 17, 2001

MEDIA STATEMENT

NGC Responds to MSC Report

“We have received the Market Surveillance Committee (MSC) report and are reviewing it in detail. The MSC has a focus on whether specific market rules in parts of the market have been broken and it has reached a conclusion that there is not an undesirable situation with regard to the rules. This does not mean that the rules are right in the first place and that the market is functioning properly,” NGC Managing Director John Barton said today.

“The fact is that wholesale prices are at extraordinary levels. Retailers with limited generation have been severely affected, together with increasing numbers of customers, particularly major employers and exporters. If the market rules result in retailers being squeezed out of the market, then changes to the rules need to be urgently considered to ensure true competition for all purchasers of electricity.”

“In fact the report says competition is likely to reduce and that expectations of the development of a financial hedge market do not appear to have been fulfilled,” said Mr Barton.

“We do not believe lessening of competition was the intent behind the electricity reforms. Therefore the rules and the way the industry is evolving needs to be looked at now or there will be nothing learnt from this situation. The fact is that many of these issues were raised during the Electricity Inquiry, and must be addressed,” said Mr Barton.

“There is a lot of value in the report which we are studying carefully,” said Mr Barton.

ENDS

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