Security The Priority, Says New Zealand Power Commission

The Electricity Commission yesterday dismissed new Government directives that it make security of the nation's energy supply its "paramount" concern, saying that maintenance of a robust network had always been uppermost in its mind.

Commission chairman Roy Hemmingway said the directive would not make a fundamental difference to the way it discharged its responsibilities. It would not have changed - for example - the commission's April decision to reject Transpower's $500 million plan for a 400kV Waikato-Auckland line.

"I do not know how the commission could have taken security of supply any more seriously than it has. The fundamental direction that we must choose the lowest-cost alternative that will protect security of supply has not changed," said Mr Hemmingway.

The Government threw its weight behind the line, which will have 430 towers, some as high as 70m, when it released a new national policy statement on energy on Monday.

Apart from emphasising security of supply, it also said the grid should be constructed to foster competition among electricity generators and encourage renewable energy sources.

Finance Minister Michael Cullen underscored the point yesterday at the Herald's Mood of the Boardroom breakfast in Auckland. "There is little point in saving perhaps $200 million if the cost is to so chill investment in Auckland, that we may lose more than that in a year. The commission is perhaps taking too narrow a view [on costs]," he said.

Mr Hemmingway said the law was clear. "I do not pay much attention to statements made by ministers, I pay attention to the law."

The cost differences between the proposal and the cheaper alternative it suggested would have been too large, even if the new policy directives were taken into account.

However, he said the Government's new emphasis on renewables and a demand that Transpower submit larger proposals in line with an overall strategic plan for the grid, would have a bearing on his decision on any upgrade.

The commission has suspended consultation on its rejection of the proposal, while Transpower considers submitting a revised plan.