The future of the Electricity Commission looks uncertain with the Government promising yet another shake up of the electricity sector.
Energy Minister Gerry Brownlee said today he favoured setting up a ministerial working party to tackle regulatory issues faced by the electricity industry.
He also said it could use a report from Business NZ as a working document for the basis of recommendations.
The electricity sector has been reviewed and overhauled several times in recent history.
The Business NZ report is highly critical of the Electricity Commission set up by the last Government and slams widespread duplication and complexity in regulations and their implementation.
National has been critical of the commission's performance in the past.
The last Labour Government was also not entirely happy with the commission and sacked former commissioner Roy Hemmingway because he tried to block an upgrade of power lines into south Auckland.
Mr Brownlee did not zero in on the commission today, but did name it as part of the problem.
"The Government believes that disentangling the regulatory overlap between Transpower, the Electricity Commission and the Commerce Commission is desirable," Mr Brownlee said.
Sorting this out would take some time, but in the short term the number of grid upgrades that had to be approved by the commission would be reduced.
He hinted this could be done by raising the $1.5 million bar that triggered the need for the commission's approval.
Recent power outages in Auckland were a reminder of the importance of advancing electricity infrastructure investment, as were figures showing a lack of new generation coming on-line, contributing to a declining security of supply.
Mr Brownlee talked about addressing sky-rocketing retail power prices and taking action if a current Commerce Commission investigation into alleged breaches of market power found shortcomings among the operations of electricity generators.
While praising the Business NZ report, he did not agree the industry should design its own rules.
"I think the wild west days of 1998 to 2003 demonstrate the perils of complete industry self-government reliant on voluntary action.
The ministerial working party would also consider "how we can get off the escalator of price hikes that has typified the last five years".
In what was his first major speech since picking up the portfolio last year, he also talked about unlocking the potential of New Zealand's energy resources, and said he saw gas as a big part of the country's future energy mix.
The Government was keen on getting new seismic data to stimulate further exploration for oil and gas and had freed up money for the purpose, he said.
Labour's energy spokesman, Charles Chauvel, said it was a good idea to look at the industry's structures but the review should be independent and thorough.
"It should be based on principles like are we able to secure sustainable generation going forward, is there proper planning for investment in the grid and is it a good idea to have three SOEs competing against each other in 70 percent of the generation space," he told NZPA.
"And can we manage a better nationwide overview of our generation needs...and isn't it better to make sure we look at all this with a fresh and independent mind rather than...pretty much relying on a report from a business group that many will fear is not independent."
Mr Chauvel said all stakeholders should be consulted, not just one section of society.
"We really need to do a bit better than that."
A timeline of recent reforms of the electricity sector:
* April 1987: Electricity Corporation of New Zealand Ltd (ECNZ) set up,
* May-July 1992: Electricity shortage.
* October 1992: Wholesale Electricity Market Study released.
* May 1993: Transpower Separation announced.
* June 1993: Wholesale Electricity Market Development Group established.
* November 1995: ECNZ Restructuring confirmed.
* February 1996: Contact Energy commenced operations.
* October 1996: The Wholesale Electricity Market commenced operations.
* April 1998: Electricity Generation, Distribution and Retail reforms announced.
* September 1998: Government decision to sell Contact Energy.
* April 1999: ECNZ Split.
* April 1999: Separation of ownership of electricity line and supply businesses completed.
* April 1999: Inauguration of system for switching electricity retailers.
* November 1999: Industry self-governing arrangements for grid security announced.
* February 2000: Electricity industry inquiry announced.
* October 2000: New Energy Policy Framework released.
* July-September 2001: Supply shortage.
* January 2002: Establishment of electricity complaints commission.
* March-June 2003: Winter supply shortage.
* May 2003: Government announces establishment of an electricity commission.
* September 2003: Electricity Commission established and draft Government Policy Statement on Electricity Governance released.
* June 2006: Electricity blackout in Auckland
* December 2006: Electricity market review completed
* July 2007: Electricity Commission notified approval of Transpower's proposal for a transmission line into Auckland.
* July 2008: Review of electricity market design by Electricity Commission.
February 2009: Energy Minister Gerry Brownlee signals ministerial working part to shake up electricity governance.
