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Consumers Will Not Accept Government Run Electricity Industry

The resounding defeat of the proposed Electricity Industry Rulebook should not be seen by the government that consumers would meekly accept a government-run alternative.

Aware of the likelihood that the rulebook would be defeated by the Government’s own state owned enterprises, Federated Farmers of New Zealand (Inc) lodged a strategic “yes” vote.

“Federated Farmers considered this was the only way of signalling to government that rural consumers will not sit back and support a ‘cost-plus’ government run alternative as provided for in the Electricity Act 2001,” said FFNZ President Tom Lambie.

“Hard questions must be put to the Minister of Energy and the Government in the wake of the failure of the industry to get majority support for the proposed industry governance arrangement.

“The Minister was told unequivocally by the Consumer Coalition many months ago that consumers would oppose a rulebook, which did not give consumers 50% of the vote.

“Electricity consumers should be angry to see $7 million of their money spent on the development of the rulebook that was doomed to fail. This is on top of the many millions of dollars spent by the Commerce Commission, and all those participating in the authorisation process.

“Transpower and Meridian, both government owned State Owned Enterprises, were key to the defeat. Both parties had already appealed to the Commerce Commission conditional authorisation.

“All domestic and rural consumers must now be vigilant to ensure the Government doesn’t expect them to pay for ‘dry-year’ reserves, that are rightly the responsibility of the hydro generators.”

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