"The report is a minor positive to the extent that it removes any down-side risk that may be priced into current share prices."
The "eagerly anticipated report" contained 29 recommendations covering security of supply, enhancing retail prices and industry governance issues, he said.
Many of the recommendations were endorsements of work already under way within the sector or endorsements of recommendations contained in other reports.
Among the recommendations was retailers being forced to make payments to consumers in the event of a public electricity conservation campaign. The suggested minimum payment was $10 a week.
If implemented, the potential costs were significant, Mr Conroy said.
There were about two million connections in the country, suggesting the weekly bill for an energy saving campaign would be in the region of $20 million.
"The aim of this recommendation is to deter the need for savings campaigns. In our view, the logical outcome will be Meridian storing more water when lake levels start getting uncomfortably low, which means thermal generation will be brought into the market earlier. This should be positive for Contact Energy with its thermal portfolio."
Implementing floor prices for a public savings campaign and the activation of forced power cuts would also be positive for Contact, he said.
There were issues to resolve concerning the recommendation to phase out Whirinaki as a reserve energy scheme, by selling it or assigning it to a state-owned enterprise.
"While we agree with the recommendation to phase out the reserve energy scheme, we are not sure that any market participant would want Whirinaki as it is very expensive to operate and in a poor location."
Allowing line companies to retail in their local areas was an interesting proposal, but Mr Conroy was sceptical that any lines company would take up the offer unless it already owned generation in the region.
Retailing was a fundamentally different business to owning a lines company, with significant different core competencies.
He would be surprised if Vector entered electricity retailing, particularly as Auckland was one of the more competitive retail locations, with some of the lowest margins in the country.
"We are sceptical that the report recommendations, if fully implemented, will have much impact on the sector."
There was nothing in the report to change Forsyth Barr's views on any of the listed companies. It maintained its accumulate recommendations for Contact, TrustPower and Vector and its hold recommendation for New Zealand Windfarms.
