Gerry Brownlee. Pic: NZPA

Wellington, April 1 NZPA - A ministerial review of the electricity sector to look at security of supply, affordability and the duplication of sector governance has been formally announced.

Energy Minister Gerry Brownlee signalled this year he was considering another shake up of the sector.

He said today the best way to tie together the various reviews under way was through a ministerial technical advisory group.

That will comprise of Brent Layton, David Russell, Lewis Evans, Stephen Franks, Toby Stevenson and Miriam Dean.

"There are a number of other reports completed or under way 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," Mr Brownlee said.

The first phase will look at regulatory and governance issues, while the second phase will address issues of electricity market performance.

"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."

Labour's energy spokesman, Charles Chauvel, said the advisory group had an impossible task because the Government had not said what it expected from the sector.

"Sustainability, affordability and security of supply must be the three key aims of any electricity sector," he said.

"New Zealanders deserve to know if the Government still intends to wring maximum profits out of the state-owned power generators.

"If they do, an ever-increasing price spiral lies ahead for consumers."

Mr Chauvel said it was not known whether the Government was still committed to 90 percent renewable generation by 2025, nor whether it was going to provide the investment needed for security of supply.

"The Government can appoint any number of committees to advise on the way the system should be structured," he said.

"But until those basic questions are answered at a political level, the consumer can expect little progress on the issues that matter."

Mr Brownlee said a discussion paper would be prepared by June and publicly consultation on the discussion paper will be held in July.

The analysis of submissions and development of final recommendations will take place from August to September with legislation prepared by the end of the year.

Mr Brownlee said the review would take the current market design as a starting point and focus on improvements.

"The assumption is that there is still room for improvement within the current market approach rather than a more centrally controlled approach."

The review process would not look at the ownership of state owned enterprises nor economic regulation of electricity lines.

Other reviews to be considered include:

* The Electricity Commission review of the events of winter 2008;

* The Commerce Commission's investigation into electricity market competition -- due to be released shortly;

* The Electricity Commission's review of electricity market design -- which has been delayed pending the Commerce Commission report; and

* A Business NZ report on electricity sector governance.

In February, Mr Brownlee welcomed the Business NZ report which was heavily critical of the Electricity Commission.

The electricity sector has been reviewed and overhauled several times in recent history and National has been critical of the commission's performance in the past.

The last Labour Government was also not entirely happy with the commission and sacked former commissioner Roy Hemmingway because he tried to block an upgrade of power lines into south Auckland.

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