New Zealand continues economic restructuring

Jun 09, 1998 02:00 AM

Apr. 8, 1998 Retail electricity price cuts of up to 20 % within 18 months for homes and business are expected to follow the New Zealand's government announcement that it will reshape the country's state-dominated electricity system.
The government will split the state-owned generation group Electricity Corp. NZ into three enterprises. It will also divide the activities of electricity supply utilities into separate line and energy businesses.
It is the latest step by the government to reduce monopoly control of the energy sector.
It comes a week after a New Zealand-owned private company launched a retail petrol business in a direct challenge to the 4 multinational companies which have controlled the New Zealand market.
Pump prices have fallen up to 15 cents a litre (90 cents a gallon) in a week in major centres.
Energy Minister Max Bradford said the new electricity companies will not be sold to private operators, and that electricity prices were expected to fall "over the next few years."
The three new generation companies would "compete vigorously" and would be required to act responsibly in ensuring security of supply.

The announcement came in a joint statement by Energy Minister Max Bradford, Treasurer Winston Peters and Finance Minister Bill Birch. "This package is all about getting some proper competition and reform in the interests of lower pricing of electricity," the ministers said.
New Zealand continues to pursue economic restructuring, 14 years after it was first launched by the then-Labour government in 1984.

Source: not available
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