Editorial: Time to get walking

OPINION: Seven months ago this newspaper wondered whether Energy Minister Gerry Brownlee had what it took to tackle the incredibly complex issue of electricity sector reform.

It will take some time before it is clear whether the recipe of changes unveiled this week will swing the balance in the consumer's favour at last, but at least Mr Brownlee should be congratulated for giving it a good go.

After years of fluffing about by the Labour Government, Mr Brownlee has taken the sector by the horns with a recipe for change that could put an end to a never ending spiral of price rises by the power companies.

A sneaking suspicion that consumers had been ripped off by power companies was confirmed by figures released in May which showed that power price rises have risen at three times the rate of inflation over the past nine years. Power bills today are 72 per cent higher than in 2000.

The Labour Government tinkered at the edges of the industry, principally by bringing in the Electricity Commission to try and bring the power companies to heel and funding the Whirinaki Power Station in Hawkes Bay to ensure security of supply.

Instead of going for punitive price controls or a return to the old state controlled model Mr Brownlee has put his faith in the market system that has so far failed to deliver.

What he has done is up the ante with a shuffling of assets that add up to more than tinkering.

Most bold is a move to break up Meridian's stranglehold on the Waitaki system by giving two power stations to rival Genesis.

Genesis is overly reliant on North Island gas and coal power and short on hydro, while Meridian, the biggest state-owned power business, struck it rich in the 1999 reforms and dominates the South Island thanks to its massive Waitaki generating capacity, arguably the jewel in the country's crown.

Mr Brownlee has claimed his reforms will put the boot firmly back on the consumer's foot. It is not clear whether Mr Brownlee is a Nancy Sinatra fan, but he may have had the lines to These boots were made for walking in mind when he decided to demand an easier transition for consumers wanting to jump wakas.

The reforms give consumers the ability to walk easily away to get a better deal from their power suppliers. In the early days of electricity reform swapping suppliers was like pulling teeth. Those days are gone with Mr Brownlee's promise that most consumers would be able to swap companies within three days with minimal inconvenience.

That means that power companies will have to sharpen their pencils to come up with competitive offers to keep customers loyal and think twice before hiking prices. Consumers will also have more choice with lines companies given the ability to sell electricity direct.

The success of this reform will largely depend on consumers' willingness to pull on the boots and get walking.

- © Fairfax NZ News