New Zealand's Electricity Lines Companies: An Ownership Analysis

Talosaga Talosaga and Bronwyn Howell

No 19227, Working Paper Series from Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation

Abstract: New Zealand's 30 Electricity Lines Businesses (ELBs) combined hold assets with an estimated value of over $8.8 billion (Commerce Commission 2012). The vast majority of analysis of the New Zealand electricity sector has focused on generation retailing and transmission activities. Very little formal analysis of ELBs has been undertaken. This paper aims to redress this imbalance. We trace the history and catalogue the ownership structures of ELBs. Using Hansmann's (1996) theory of enterprise ownership we analyse the economic factors underpinning the evolution of the ownership forms of New Zealand's ELBs since reforms in the 1990s with particular emphasis on its ability to explain ownership differences observed between ELBs serving urban and rural constituencies. We find that despite the reforms' bias towards private ownership co-operative and trust structures predominate in rural New Zealand. However privately-owned ELBs are much more likely to be serving urban communities. We suggest that this is likely a consequence of the smaller size of and greater homogeneity of interests amongst the communities served by rural ELBs.

Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:vuw:vuwcsr:19227

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