10 June 2004

New Commerce Commission appointment

Current Electricity Commission Chair Roy Hemmingway has been appointed as an associate member of the Commerce Commission, Commerce Minister Margaret Wilson announced today.

His appointment, in respect of Part 4A (electricity thresholds regime) matters under the Commerce Act 1986, runs until14 September 2006 to coincide with the expiry date of his Electricity Commission term.

Margaret Wilson said Roy Hemmingway’s appointment would strengthen the relationship between the two Commissions in respect of regulatory oversight of Transpower and the electricity lines businesses.

The Electricity Commission is the new electricity regulator with broad responsibilities for oversight of the performance of the electricity industry. The Commerce Commission also administers a targeted control regime to encourage Transpower and the electricity lines companies to improve efficiencies for the long-term benefit of consumers.

“Having Roy Hemmingway appointed to the Commerce Commission will ensure the combined impacts of regulation on electricity lines businesses are taken into account and the compliance costs for business are minimised”, Margaret Wilson said.

Before taking up Electricity Commission appointment in September 2003, Roy Hemmingway was Chair of the Public Utility Commission in the State of Oregon, USA, where he was involved in national and state efforts to create competitive markets for electricity.

He spent most of his 30 years in Oregon working in the public sector on matters involving electricity. He served as a policy advisor to three Oregon governors and was a key figure in establishing the Northwest Power Planning Council, a four-state electricity planning body. In the private sector, he worked as a consultant to the electricity industry in Oregon and Washington.

Margaret Wilson said the roles of the Electricity Commission and the Commerce Commission in the electricity industry are to be amended by the Electricity and Gas Industries Bill currently before the Commerce Select Committee. The Bill provides that the government may transfer to the Electricity Commission responsibility for administering Part 4A of the Commerce Act in respect of Transpower only, or all electricity lines businesses, in certain circumstances. The Bill is expected to be reported back to Parliament in late June.

Commerce Commission’s role and appointments to the Commission Electricity Commission’s role

BACKGROUND

Commerce Commission The Commission is a Crown entity established under the Commerce Act 1986. It is responsible for promoting and protecting competition and fair trade in New Zealand markets through its statutory enforcement and adjudication functions under the:

Commerce Act 1986 Fair Trading Act 1986 Electricity Industry Reform Act 1998 Dairy Industry Restructuring Act 2001 Telecommunications Act 2001; and Credit Contracts and Consumer Finance Act 2003.

Part 4A of the Commerce Act 1986, which began on 8 August 2001, establishes a targeted control regime for the regulation of large electricity lines businesses (distribution businesses and Transpower).

Appointment of Associate Members to the Commerce Commission The Minister of Commerce may appoint any person to be an associate member of the Commission for a term of up to three years. There is no legislative limit on the number of associates the Minister can appoint. An associate has similar powers and functions as members but is appointed only in relation to a matter or a class of matters that are specified in their warrant of appointment. Associates may attend and vote only at a meeting of the Commission relating to their warrant.

The Commission now has two associate members; Shaan Stevens and Roy Hemmingway.

Appointment of Members to the Commerce Commission The Governor-General, on the recommendation of the Minister of Commerce, appoints the members of the Commission. The Commission must consist of not less than six and not more than eight members. The Members are:

Paula Rebstock ,Chair David Caygill, Deputy Chair Peter Taylor Donal Curtin Denese Bates, QC Douglas Webb, the Telecommunications Commissioner; and Fiona Bolwell and Terence Stapleton, the Cease and Desist Commissioners.

Electricity Commission

In 2003, the government established the Electricity Commission to govern the electricity sector and to take primary responsibility for achieving the Government's policy objectives for electricity. It has broad ranging functions under the Electricity Act in respect of security of supply and governance of the industry.

ENDS

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