Tuesday, 17 July 2001 Media Statement
Welcome reassurance on electricity market integrity
Energy Minister Pete Hodgson says today's electrcity market watchdog report offers a welcome reassurance that current
high wholesale electricity prices are not the result of market manipulation or abuse of market power.
The NZEM Market Surveillance Committee Report follows its month-long investigation into allegations that wholesale power
prices have been pushed unreasonably high. It found no evidence that any market participant engaged in or attempted
manipulative activity, or used market power to limit competition in the retail market.
"This is a diligent, comprehensive and useful report," Mr Hodgson said. "I'm pleased that the committee has found no
mischief behind current market conditions."
"The report has also reminded us that we have a less than perfect electricity market in some respects. That is why the
Government is in the process of making adjustments to the structure of the industry."
Particular areas for improvement noted by the committee include a need to update voting powers in the governance of the
market, a need for financial transmission rights and a need for more transparent information in future hedge prices.
"All of those improvements are in train under the current reform process," Mr Hodgson said. "The government is also
introducing measures to encourage the development of demand-side bidding in the wholesale market, which will help
address the lack of market depth the MSC has commented on."
ENDS