The Commerce Commission has warned electricity companies it will take a tougher line with them now that the settling down period after deregulation is over.

Commission Chairman Dr Alan Bollard said today at an electricity industry conference that up to now the Commission has taken an educative and cajoling role to ensure compliance with the Commerce Act as the industry adapted to deregulation.

This approach has generally been successful and most complaints have been resolved without needing court-based solutions.

"However, some significant issues remain unresolved and some power companies appear, at this stage, unprepared to modify their positions," Dr Bollard said.

"Accordingly, Commission staff have targeted a limited number of companies for investigation to determine whether their behaviour amounts to a breach of the Act.

"Resolution of these matters will, I am sure, provide useful precedents for the remainder of the industry."

Dr Bollard said the Commission will not release the names of the companies unless it takes enforcement action against them. Enforcement could include negotiated settlement or court action seeking injunctions and financial penalties.

Dr Bollard said the general principles of the Privy Council's Clear/Telecom decision will apply to the electricity industry because the issue of access to networks is similar.

These principles give a guide to conditions and charges a power company can impose on competitors who want to use the company's network.

He said the detail of how the Privy Council ruling will apply may change as the Government may yet amend its policies in light of the ruling.

He emphasised the Commission does not advise the Government on any policy. The Commission enforces the Commerce Act and is independent of the Government. The Ministry of Commerce advises the Government on the Act.

"The Commission values its political independence and guards it jealously. I would emphasise that in my time at the Commission there have been no attempts made by the Government to place pressure on the Commission to make a particular decision.

"It was therefore very disappointing to see a recent article in the National Business Review suggesting that the Commission was pressured by the Minister of Agriculture to authorise the recent bid by a consortium to buy and keep closed the Weddel meat processing plants. That article was completely wrong.

"The Minister applied no pressure on the Commission. Nor would the Commission have been influenced by any political pressure if it had been attempted. The Commission's decision in that case, like all its other decisions, was made solely on how Commission Members saw the merits of the case and without the involvement of Ministers.

"In my view this is a major strength of our system, and one that not all OECD countries can boast," Dr Bollard said.

Copies of Dr Bollard's speech are available from Communications Officer, Vince Cholewa, phone work (04) 471 0180, home (04) 479 1432