The New Zealand Herald reports that Vector is making submissions to the Parliamentary commerce select committee currently considering the Electricity and Gas Industries Bill.

Vector chief executive Mark Franklin says, in a letter sent to Cabinet ministers, that no limits should be applied to lines companies in either generating or retailing electricity.

New Zealand desperately needs new investment in generation capacity so it makes no sense for a large body of potential investors, such as Vector, to be prohibited from investing in electricity generation. Franklin says it would be commercially viable to invest in generation without any retail involvement.

"Recent developments, including the cancelling of (Meridian Energy’s South Island) Project Aqua, make it even more imperative that the government creates a regulatory environment that facilitates the achievement of its objectives for the electricity industry," he adds.

It is known that no other country has the large vertically integrated electricity generators-wholesalers-retailers that New Zealand does, while its lines companies are effectively prohibited from any significant involvement (over 10%) in generation and all retailing.