1 February 2006
Controls on Transpower could pave way for alternatives
Proposed Commerce Commission price controls on lines company Transpower have been welcomed by Green Party Co-Leader
Jeanette Fitzsimons, not just because it will save consumers up to $700 million, but because monopoly pricing seriously
distorts choices about the future of the electricity system.
"Transpower says its price increases - 19% this year and 13% per annum for the next five years - are to pay for its
proposed lavish grid upgrade. But not only has this project not been started yet, it hasn't even been approved. Imposing
double-figure percentage increases for a speculative project cannot be justified, especially when there are better
alternatives available," Ms Fitzsimons says.
"Before the grid upgrade can take place, the Electricity Commission must agree that it is the best way to meet future
demand. The upgrade must also gain Resource Management consent, which will be difficult given that it will impose giant,
intrusive pylons on people's land and create electro-magnetic fields near their homes."
Instead of Transpower's proposed line upgrade, the Greens have long advocated an alternative package. Measures in this
package would see gas being used directly in Auckland rather than being converted to electricity further south, more use
of waste wood in industry and homes in the north, better load management to avoid system peaks, and a comprehensive
energy efficiency programme across Auckland.
"This package would almost certainly be cheaper than Transpower's upgrade, more sustainable because it needs less fossil
fuel, and more environmentally acceptable because it avoids new pylons and produces less greenhouse gas," Ms Fitzsimons
says.
"However, its eventual implementation is being undermined by Transpower's ability to raise capital in advance by price
gouging. The Commerce Commission must prevent this tilting of the playing field, and its decision to impose price
controls is to be applauded."
ENDS