Electricity pricing review

“In recent weeks, we’ve had Meridian, Mercury and Trustpower – all of whom have reported bumper profits this year – and others on their behalf complaining publicly that the new Government’s proposed review of retail pricing should be directed at lines companies rather than themselves.

 

“But one has to ask, if the retailers are really so confident the existing market model is working well for consumers and leading to true retail competition, why would they have an issue with a review?

 

“By comparison, local lines companies are regulated entities, mostly community owned, with transparent charging that has generally tracked with CPI for a decade now. And at the same time as delivering on their end of the supply chain they have invested significantly in future energy infrastructure and resilience.

 

“The last government review into New Zealand’s electricity market design was almost 10 years ago. A review is clearly well overdue given the length of time the generation and retail market has been operating with such little independent scrutiny and transparency.

 

“Other countries that have very similar markets, such as the UK and Australia, have recently reviewed their own generation and retail electricity markets and have expressed concerns about retail profit margins and the level of true competition in those markets, so it is not unreasonable for the New Zealand Government to consider the same questions about the way in which retail profits are made here.

 

“Rather than trying to shift the spotlight to try and influence the new Government before they have even started their review work, the electricity retailers should be focused on doing the right thing for New Zealand consumers. It really does feel a case of ‘protesting too much’.”