Friday, April 28, 2006

Herald comment on the Transpower conundrum

here.
Nothing new added but I have to mention this:
Analysts questioned whether the Electricity Commission had deprived Transpower of the ability to make the investments it saw fit. If so, the regulator had diluted the national grid operator's duty to ensure that energy flowed to where it was needed.

"If the shower goes cold in Auckland, you will want some comeback," said one industry source.

McDouall Stuart analyst Chris Stone asked: "Is it the role of the regulators to determine where Transpower's next investment is going to be?"
I would hope that a monopoly with cost+ charging schemes would be subject to public benefit oversight. The fact that they disagree might imply they are doing their job.
Market analysts never say that companies should go with the least cost option, always the maximum return for the 'shareholders'. I think these guys really believe Transpower is like a regular company and not a state sanctioned monopoly.

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