The Government has been challenged to buy New Zealand's electricity distribution lines and regulate pricing throughout the country, but industry leaders say that is unlikely to happen.
Waikouaiti resident Pat Deady, a retired banker, said the ministerial review of the electricity sector was a waste of time as it did not look into distribution lines charges, which in part accounted for power bill variations throughout the country.
Energy Minister Gerry Brownlee announced in April a ministerial review of the electricity sector, which was put before the Cabinet for consideration yesterday and is expected to be made public this week.
Mr Brownlee claimed the review could lead to consumer rebates for those who used less electricity during power-saving campaigns, although the review specifically did not look at economic regulation of electricity lines.
A spokesman from Mr Brownlee's office said details of the review could not be disclosed until it was made public.
Mr Deady said the Government should buy electricity distribution lines.
He criticised the review for not including a consideration of lines charges, which are set by 29 separate companies nationwide.
"They are just ducking the issue . . .
I believe the review will do little or nothing [to reduce power bills]," he said.
If distribution lines were owned by the Government, charges could be regulated, which would lead to a fair price for all New Zealanders, rather than different pricing for consumers depending on where they lived, he said.
Transpower owns and operates the high voltage grid (transmission lines), but the low-voltage network (distribution lines) is owned by 29 separate distribution lines companies, some of which evolved from the old electric power boards.
Each distribution company charges power companies for using its network - a cost passed on to consumers.
Transpower charges for the high voltage grid are included in distribution company charges.
Mr Deady cited comparisons of lines charges gathered in centres around New Zealand over a 31-day period and found a wide range, from $61.69 in Waikouaiti and Palmerston to only $4.65 in Wellington.
"I wanted to know if the charges could be considered fair and equitable.
While power charges are constantly overseen, line charges seem out of control and unfairly apportioned," Mr Deady said in a submission to the Electricity Commission last month.
He received a reply from the Electricity Commission dated July 16, which stated "as monopolies, the distribution companies set their own charges within the regulatory framework maintained by the Commerce Commission".
Electricity Commission chairman David Caygill, of Christchurch, told the Otago Daily Times it was "extremely unlikely" any government would buy the distribution lines, and prices would vary anyway.
"There would be a lot of opposition to the Government owning [distribution companies].
"Even if we had the same pricing structure across those 29 companies it's quite unlikely we would end up with the same prices because the costs [of distributing electricity] are different," he said.
Mr Caygill, a former minister, said most of the distribution companies were owned by consumer trusts, some by local authorities, and others were privately owned.
He said people should be able to afford electricity no matter where they chose to live, but people should not "pretend" costs were the same everywhere.
The Electricity Commission was reviewing distribution pricing methodology in conjunction with the Commerce Commission, with the aim of providing incentives for distribution companies to adopt a more standardised approach to pricing, he said.
Power plays
Lines charges from selected NZ centres over a 31-day period, before any power was used. - Waikouaiti $61.69
• Palmerston $61.69
• Waimate $50.22
• Oamaru $31.62
• Dunedin $24.80
• Christchurch $20.46
• Auckland $5.17
• Wellington $4.65
