Gerry Brownlee

Gerry Brownlee

Power companies will not be expected to pay back $4.3 billion in overcharging, Energy Minister Gerry Brownlee said this morning.

The Commerce Commission yesterday released its long-awaited report into the electricity market.

It concluded each of the four big generators - Meridian, Contact, Genesis and Mighty River - has been exercising the power the market's design gives them to command unjustifiably high prices, at least during years when inflows to the hydro lakes are low as they were in 2001, 2003 and 2006.

The report alleged the generators overcharged customers $4.3 billion over six years by using their market dominance.

But this did not amount to a breach of the Commerce Act, the commission said. It was a lawful and rational exploitation of the opportunities the market gave generators and they would not be hauled before a court.

Speaking on Radio New Zealand this morning Mr Brownlee said refunds were not an option. He pointed out the report looked at the wholesale not the retail market, but also it was too difficult.

"Most of this happened in the past, it happened over the seven years up to 2007," he said.

"The 2008 year hasn't been part of the assessment...you've got to remember to that the household sector is just on a third of all electricity use so it becomes very, very difficult to work out who actually has paid for what."

Behaviour 'unaccpetable'

Labour's energy spokesman Charles Chauvel said the companies had behaved in a way unacceptable to most people.

He warned against any attempt by the Government to secure higher dividends from the state-owned companies.

"The report shows why this would be a terrible idea...Kiwi families must come before government dividends and reform must be a priority."

Mr Brownlee said the Government was telling state owned enterprises to lift their act, but that did not necessarily mean price hikes.

"I don't think anyone should assume that better performance simply means higher price," he told RNZ.

"In most cases it means exactly that, better performance, better delivery to customers and I suppose you'd say better service as well."