Departing Electricity Commissioner Roy Hemmingway says he was forced out of his job for following Government policy rather than bending to political pressure from senior Cabinet ministers over Auckland's power supply upgrade.
Hemmingway, who was removed from his job last month, told Parliament's commerce select committee yesterday the Government had promised the commission was to be independent when he took the job in 2003 but "this has turned out not to be true".
Despite encouraging early signs of minimal interference from then-Energy Minister Pete Hodgson, the Government's intention in setting up the commission was to distance itself from unpopular decisions while retaining ultimate control of the sector.
"If you're going to have a regulatory commission, why bother putting qualified people in if you can simply ignore what they do?"
Hemmingway said he regretted taking the job and given the degree of political interference he had experienced, it would be difficult for the Government to find a competent replacement. "I wouldn't recommend that someone take the position."
In June, Hemmingway and other commission members met Energy Minister David Parker, Finance Minister Michael Cullen and senior Transpower executives and were told to reach an agreement on state-owned Transpower's plans to build a 400kV line from the Waikato to Auckland.
"I found this to be quite unfortunate because what is very important is that Transpower finds a way to get an investment approved under the rules. The rules are the law, they are what the Government gave us."
The commission and Transpower were told to negotiate to find some middle ground, even if that meant they had to "stretch things a bit".
"As a regulator I don't think that's appropriate," Hemmingway said.
He was ultimately removed as commissioner because he wanted to comply with the law rather than "push the boundaries".
He spoke of another meeting with Parker in June attended by other commission members at which the minister read through several pages of notes outlining what he wanted the commission to do. That included speeding up decision-making over the Waikato transmission line "and giving greater deference to Transpower".
Although not overtly threatened, "it became apparent I wasn't long for the position ... I wasn't free to ignore the sentiments of Government".
Parker said yesterday that Hemmingway, who leaves New Zealand next week, was "obviously an embittered man".
"He doesn't like the fact that he has not been appointed for another term.
"I make no apology for the fact that when security of supply gets ropy there is political accountability in New Zealand and politicians step in. And I did."
Parker said he had never directed a particular outcome from the commission.
"Both Dr Cullen and I have been at pains to say we wanted an outcome to this protracted procedure - not what it should be, but that we wanted to get to one."
Relationships at the highest level had broken down between the commission and Transpower but he cited the appointment of Wayne Brown to the Transpower board as a move to address that.
Cullen said he and Parker had become concerned that the commission and Transpower were at loggerheads over the Waikato lines issue, and what was being threatened was not the reputation or the self-pride of any individual but New Zealand's and Auckland's future economic welfare.
"In that situation we reserve a perfect right to say to people that we expect you to come to a sensible conclusion here and encourage them rather strongly to do so."