Ministerial Review of Electricity Market

The Energy and Resources Minister, Gerry Brownlee, says a Ministerial review of the electricity sector will start work immediately.

The Minister released the Terms of Reference for the review today and announced the six independent experts being appointed to a Technical Advisory Group.

“The government has concerns about security of supply, the affordability of electricity, and duplication of electricity sector governance,” said Mr Brownlee.

“There are a number of other reports completed or underway in the electricity sector. The best way to draw the threads together and make timely decisions to build public, industry and investor confidence is to proceed with a Ministerial review,” he said.

“I am pleased to announce six experts appointed to the Technical Advisory Group: Brent Layton, David Russell, Lewis Evans, Stephen Franks, Toby Stevenson, and Miriam Dean,” said Mr Brownlee.

The Technical Advisory Group will be supported by the Ministry of Economic Development and is broadly modelled on the advisory group structure used in the first phase of the reforms to the Resource Management Act.

The review was signalled by the Minister of Energy and Resources in a speech to the National Power Conference recently.

“I am anticipating two phases of work in the Ministerial review.  The first phase will look at regulatory and governance issues, while the second phase will address issues of electricity market performance,” said Mr Brownlee.

“It may be that the review process throws up some obvious short term improvements that can be made and if so these will be acted on immediately,” he said.

Questions and Answers about the Ministerial Review.

What is the time-table for the Ministerial Review ?

The Advisory Group will liaise with Ministers between March and May 2009.

A discussion paper will be prepared by June 2009 and publicly consultation on the discussion paper will be held in July 2009.

The analysis of submissions and development of final recommendations will take place from August to September 2009.

Final Cabinet discussion and preparation of any necessary legislation will take place by the end of the year.

What is the review considering ?

The review will examine market design, regulation and governance issues.

It will take the current market design as a starting point and focus on improvements to this model. The assumption is that there is still room for improvement within the current market approach rather than a more centrally controlled approach.

Are there areas the review will not consider ?

The review process will not look at the ownership of SOEs nor economic regulation of electricity lines.

What reports will the review be considering ?

There are a number of recent and ongoing reviews which are relevant.

The Ministerial review will consider:

1. The Electricity Commission review of the events of winter 2008.


2. The Commerce Commission’s investigation into electricity market competition – due to be released shortly.


3. The Electricity Commission’s review of electricity market design – which has been delayed pending the Commerce Commission report.


4. The LECG report on electricity sector governance.

Did the Government promise this Ministerial Review ?

The Energy and Resources Minister signalled this approach in a speech to the National Power Conference earlier this month. National’s policy going in to the 2008 election was for a review of electricity governance.