Media release - Commerce Committee

Select committee presents comparative report on
State-owned electricity generators

2 April 2001

“Today the Commerce Committee presented a comparative report to the House on the 1999/2000 financial reviews of Genesis Power Limited, Meridian Energy Limited and Mighty River Power Limited”, said Chairperson David Cunliffe.

The committee reported on the following matters:

- Financial performance by the State-owned energy companies was mixed. Meridian performed strongly, Genesis’ financial performance was in line with its business plans and Mighty River performed below forecasts.

- We questioned the companies about the potential return on equity ratios for different gearing levels and requested further information.

- We considered the issue of transmission constraints in the central North Island and will pursue this issue further in our forthcoming financial review report of Transpower.

- We have concerns about the potential amount of electricity generation lost through hydro spill and its potential effect on economic efficiency and the environment, including New Zealand’s ability to meet targets to be set up by the Kyoto Protocol.

- We are concerned about continued switching problems being experienced by certain retail customers. Switching systems and protocols are inadequate, require more attention and we urge the industry to work together on this issue.

- We are very concerned that retail customers of State-owned energy companies continue to be experiencing billing delays and problems, and will monitor developments.

- We are concerned at the relatively low levels of customer satisfaction across the industry. We expect to see improvement in the near future and will be actively monitoring progress against performance targets.

- We consider that reporting standards between the three State-owned energy companies in relation to environmental impact reporting and customer service performance are variable and believe that there is room for improvement.

The report is available from the Bills Office (Members and Press Gallery only) or committee staff. Transcripts of oral evidence are attached to the report, which can be viewed on the Parliamentary website.

ENDS

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