"We have moved from a light handed regulatory approach to a heavy handed one, and now this, the expropriation of property rights, because that's exactly what it is," Boulton told EnergyReview.Net in recent days.

"I have no problems with ordinary people or businesses having a free connection to our network because that allows them to receive electricity. What I do object to is generators having free access to our lines, in effect other people subsidising their investments and their profits."

Last Friday Hodgson released a discussion paper outlining proposals to regulate lines companies' charges and conditions for connecting generators to their networks. The proposed regulations would allow generators of 10kW or less to connect to local lines free of charge, while for generators above 10kW, lines companies could seek reasonable payment for any new assets needed to cope with the extra load.

Hodgson said he expected regulating line charges for this distributed generation would help the expansion of renewable generation and was another way to progress towards a sustainable energy future. Submissions on the discussion document close by November 3.

Boulton said farmers would not be able to charge for any use of their property if small generators wanted to set up a wind farm on their land. "That's an infringement of property rights." By comparison oil companies paid affected landowners when they drilled a well on private property.

Boulton also said the government would do far better if it allowed the 28 lines companies to re-enter the retail power market and to match any small embedded generation capacity they had with the equivalent retail customers.

That would allow many more electricity retailers onto the scene and free up an additional $NZ2-3 billion of potential funding as lines companies would be able to present balanced packages, their local generation backed by customers, to financial institutions.

What Energy Minster Pete Hodgson was now proposing was actually a disincentive for further electricity generation and transmission, said Boulton. Lines companies would not be building new infrastructure or upgrading existing networks because any spare capacity could be used free of charge by small renewable generators.

Boulton likened the "free carry" situation to people arriving after check-in time at an airport and expecting free flights because there was spare capacity, the plane was leaving anyway, and other people had already paid for the service.

Electricity and gas reticulators were being unfairly singled out and now had to spend significant time, money and other resources fighting the many tentacles of the State-owned octopus - the Economic Development Ministry, the Commerce Commission, Electricity Commission and other quangos (quasi autonomous non-government organisations).