Source: Radio New Zealand
Simon Watts. RNZ/Mark Papalii
Tougher fines are on the way for electricity providers and retailers that breach the rules, in a move to give the Electricity Authority more teeth to maintain a fair and competitive market.
Energy Minister Simon Watts said this year the authority will be able to hand out instant infringement fines of up to $2000 for minor breaches.
And from next year, heavier duty penalties will increase from $2 million to the highest of three options – a $10m fine, 10 percent of a company’s turnover or three times the gain made from the breach.
“This is about being a credible deterrent to not meeting the rules and not playing fairly in the market,” Watts said.
“It’s making sure that the penalties and infringements are significant enough to ensure that they are a credible threat.”
Watts said a stronger Electricity Authority will improve competition and should mean more affordable power.
There have been calls to split the generation and retail arms of the large power companies, with the aim of increasing competition and lowering prices.
Last year the Auckland Business Chamber released a survey showing 49 percent of people wanted power gentailers broken up, and 62 percent wanted the government to underwrite the cost of new electricity generation.
Watts said the new penalties will match what the Commerce Commission can do and allow better monitoring of the electricity market.
“Kiwis are feeling the pressure of high power bills. The government is moving quickly to fix this by strengthening the Electricity Authority, which oversees the electricity market and makes sure power companies play by the rules.”
The changes will require amendments to the Electricity Industry Act.
Watts said good progress had been made on National’s energy plan, announced in October:
- commenced the first stage of the procurement process for an LNG facility to provide New Zealand with greater security of supply
- assessed new energy projects under the Fast-Track Approvals process which will increase supply and unlock investment in new generation
- started work on a new regulatory framework to prevent dry-year shortages that drive up prices.
“These steps are about making sure New Zealand has the affordable, abundant, reliable energy our economy needs,” Watts said.
“It’s critical to have strong leadership at the Electricity Authority to ensure it can support the market to deliver abundant and affordable energy.”
The government has also agreed to the appointment of new members to the Electricity Authority Board.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
