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Power pricing not just a rip-off, it’s immoral

Written By: - Date published: 3:23 pm, March 22nd, 2019 - 43 comments
Categories: Economy, uncategorized - Tags: , , ,

Submissions for the final report on the Electricity Price Review closed today at noon.

My recent experience with Genesis Energy reveals pricing by power company majors not only rips customers off, but is immoral.

The initial report of the EPR is unlikely to address this issue.

My enlightening experience began with Genesis informing me late last year that the pricing regime applying to my account was being “reviewed”- ie the gas price was being hiked to $0.0809 cents per kWh from $0.0483 – a 67% hike.

When I wrote to Genesis to tell them I thought the hike was outrageous, especially considering my electricity bill had gone up 14% over the last year, and that I would be “reviewing” my relationship with the company, I received an email from the Genesis “movers team” offering me a new contract at the old price.

Only because I am the sort of person who roughly knows my way around systems was I able to get the price hike revoked (though I wasn’t smart enough to stop Genesis hiking my electricity price 14% in 2017 when the inflation rate was under 2%).

When I asked for an explanation of how, suddenly they were able to offer me a new deal at the old, much lower rate, I received this response: “The reason why you (sic) rates were increasing in price as those are our non-contracted standard rates. With (sic) accepting out (sic) eSaver contract, we were able to fix your rates onto our lowest regional rates available.

The question is: what happens to people with less ability to push back? Essentially we have a system where the vulnerable end paying higher power prices than the less vulnerable.

Exploitation of the vulnerable also happens via the widespread practice of prompt-payment discounts, which Genesis still operates. These can be as high as 26% of the bill. Budgeting and advocacy groups say those discounts are really late-payment penalties. The discounts again favour those in society who are organised and have the wherewithal to always pay on the due date.

This unwelcome practice was highlighted in the current industry review that came about as a result of NZ First’s decision to go with a Labour-led government.

Meridian Energy responded to the review’s recommendation to end the practice by giving everyone the discount rate, at a cost of $5 million to the company. Those of Meridian’s 18,000 customers who will no longer be penalised for paying their bills late will save around $20 to $30 every month.

The review’s initial report highlighted the market has developed into a two-tiered beast between those who shop around to enjoy the benefits of competition and those who do not and pay higher prices.

Genesis, known in the jargon as a gentailor (because it is generator and retailer), is the largest electricity retailer, with around a quarter of the electricity market and 40% of the gas market. The 51% government-owned company is the third largest electricity generator. It was formed as part of the 1998–99 reform of the New Zealand electricity sector, taking its one generation capacity from the breakup of Electricity Corp of New Zealand (ECNZ). In April 2014, the National Government sold a 49% stake at $1.55 per share (today $2.68, and that is another sordid story).

Since deregulation of the energy sector began, households are paying 80% more for power today than in 1990, after adjusting for inflation. It is estimated about 103,000 households spent more than 10% of their income on domestic energy – a situation described as “energy hardship”.

The first stage of the industry review was delivered in September. According to Energy Minister, Megan Woods, “the report is a clear demonstration that the market is not working for everyone. New Zealanders deserve affordable electricity, but too many households are struggling to pay their bills.

In her news release, Woods alluded to the problem identified in my pricing “review”.

For residential customers it appears that a two-tier retail market is developing. People who actively shop around enjoy the benefits of competition, and those who don’t are stuck with prices.

The average gap between what you might be paying, and the cheapest on offer, has increased by about 50% since 2002.

The review has found that some households struggle to understand the various plans and how to choose the one that’s best for them, and low-income consumers miss out more often on prompt-payment discounts – which can be as high as 26 per cent of the bill, and which budgeting and advocacy groups say are really late-payment penalties,” Woods said.

According to the review, electricity prices have essentially stabilised since 2015. (That clearly did not stop Genesis hiking my price by 14% in 2017.)

Stabilisation has resulted from people shopping around when confronted with a hike. The industry is plagued by very high rates of “churn”, where customers jump from retailer to retailer to avoid the kind of hike Genesis tried to push onto me. That trend is encouraged by public campaigns such as “What’s my number” and pro-market advocates would argue that this shows the market is working.

Acquiring new customers by providing incentives, or by knocking on their front door until they jump ship, is expensive and is again essentially paid for by vulnerable customers. Estimates range from $200-300 to acquire a new customer up to the thousands that Z Energy recently paid for Flick in its desperation to diversify.

In August, all the big retailers, except Meridian, lost customer connections. Contact Energy reported the largest loss of more than 3700 customers, although 2000 of those were due to the Auckland Council moving to Trustpower. The biggest gainers were the Tier Two retailers – Electric Kiwi, Pulse Utilities, Energy Club, Switch Utilities, Ecotricity, Nova and Flick Electric.

Customer churn can also be very disruptive to power companies. Flick lost 3,500 customers in two months following wholesale power price spikes in October. Companies are aware of the dangers of large-scale customer loss and price their offerings according. So we all end up paying for this churn, but generally some pay more than others.

 

Simon Louisson is a former reporter who worked for The Wall Street Journal, AP Dow Jones Newswires, New Zealand Press Association and Reuters and as a political and media adviser to the Green Party

43 comments on “Power pricing not just a rip-off, it’s immoral ”

  1. Ad 1

    Great to see Vector get a $3.5 million fine for the power outages last year.

    https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12215296

    Big ups to the Commerce Commission litigation team for the win.

    Also thankyou Justice Duffy.

    Now, I know this post is about pricing, not lines and supply.

    But it’s so rare these days to see a major get one in the eye for the consumer.
    They could have spent that fine on undergrounding their lines in Auckland’s west.

    Vector you are a shit organisation and your customer service and commitment to Auckland sucks wholesale.

    Hope every bit of that fine comes off your bonuses.

    • Dukeofurl 1.1

      Not for last years ‘hurricane’ , was earlier

      “which resulted in it breaching the Commission’s regulations on quality standards in the 2015 and 2016 financial years.”

    • Paaparakauta 1.2

      Is that Jacinda in the image above saying ‘Help’ ?

    • Graeme 1.3

      Waiting on the “naughty step” for the same sort of prosecution is Aurora, the Central Otago and Queenstown Lakes lines company.

      https://www.odt.co.nz/regions/central-otago/aurora-explains-itself-codc

      Aurora’s owner, Dunedin City Holdings ripped the guts out of the company to fund the Dunedin Stadium, resulting in no maintenance on a network that already had a huge deferred maintenance issue. So there’s been poles fall over outside Clyde School (fortunately no kids standing there at the time, if it had gone a few hours earlier would have been messy), poles come down with someone working on them (fatal) and in some streets most of the poles with red, “No Climb” tags.

      And then they had the cheek to go to the Electricity Commission wanting to put charges up to fix it. That’s gone strangely quiet.

  2. For residential customers it appears that a two-tier retail market is developing. People who actively shop around enjoy the benefits of competition, and those who don’t are stuck with prices.

    Its called ‘The Loyalty Penalty’.

    Some consumer group should run an advertising campaign on behalf of businesses with a “loyalty Penalty”, they need to be outed, but NOT to make us change providers…to make them lift their game.

    https://www.theguardian.com/money/2018/dec/19/watchdog-plans-price-caps-to-stop-4bn-loyal-customer-rip-off

  3. WeTheBleeple 3

    I had a very similar experience. I wrote them complaining the bill was too high and they gave me a hefty discount. I inquired why this discount was not default, and how many others were they fleecing etc. They replied how they were.

    ‘taking it under consideration’

    That was Mercury.

    Same animal, different coat.

  4. cleangreen 4

    We know that the electricity price is a ripoff as the base price should be abut half of what it is here in line with the majority of the OECD.

    https://www.oecd-nea.org/ndd/pubs/2015/7057-proj-costs-electricity-2015.pdf

    Hydro: Hydroelectric plants are very site-specific, and so one would therefore expect to see a wide range of costs.

    Overnight costs for small hydro plants (10 MW or less) range from USD 1 368/kWe in the United States to USD 9 400/kWe in Germany.

    For large hydro plants in OECD countries,

    overnight costs range from USD 1 195/kWe in Spain to USD 8 687/kWe in Japan. In non-OECD countries they range from USD 598/kWe in China to USD 3 971/kWe in Brazil.

    Privatising the ‘essential service’s was a crime here, as we built them for ourb serurity and National flogged them off and we got shafted.
    .

    • Dukeofurl 4.1

      The power price we pay isnt set at the ‘lowest cost’ , rather its the highest cost provider sets the cost for all- for each half hour period. So varies through out the day.

      Some people are unfortunately comparing price rises to inflation – doesnt work that way as shortages rachet up prices considerably and if you are on a fixed price contract for the year the increased price for short periods is considered in setting the next years fixed price.

      Power prices are more like the price of potatoes, wholly dependant on supply and subject to weather related swings .
      In theory they should swing down as well but they rig the available supply to reduce that chance.

    • Ian 4.2

      The green party destroyed a big hunk of the value of those shares.You need to look at the unintended consequences of your activism. You cost taxpayers a lot of dosh and you provided investors a cheap buy.Your immediate need at the moment is to silence your hate filled spokeswomen.

  5. We were told in the 1980’s that power prices would drop after freeing up the market under neoliberalism.

  6. cleangreen 6

    While our use of power is dropping the cost is rising according to these sets of global power consumption, NZ is dropping. So should the cost per KW.

    Use the common model of if it is scarce then the cost rises.

    So we are being ripped off all the way to the bank folks.

    Electric power consumption (kWh per capita)
    IEA Statistics © OECD/IEA 2014 ( iea.org/stats/index.asp ),

    https://data.worldbank.org/indicator/eg.use.elec.kh.pc

    • Dukeofurl 6.1

      data is out of date.
      GFC effects reduced growth in power consumption, may have even reduced it, economic boom since then has changed all that.

      We are very susceptible to weather related shortages of hydro lake storage. Lots of rain and winter snow increases flow through South Island power stations. Its a complicated system but projected say winter hydro flows leads to power companies buying future hedging contracts driving up the price.
      A recent instance over a shutdown of a natural gas pipeline for maintenance has led to suggestions one of the retailers knew in advance and was able to buy hedging contracts for a low price before the others knew who tried to do the same thing but at higher price, a really high price. ( I hope I have got all details right)

    • RedLogix 6.2

      It’s worth noting that when it comes to utilities like power and water, the dominant component of the pricing comes from fixed costs. In the case of your water supply I know it’s usually 90% of the total price.

      For instance when I was in the water business, our wholesale price to the councils was 50c/m3, while as long as demand stayed within our production capacity, the marginal cost was 5c/m3. Roughly. I’m not sure how the numbers stack up in the electricity game, but I’d be fairly sure the fixed costs (capital, maintenance, labour, etc) would be the dominant portion.

      This means that as consumption drops, the price per unit rather perversely has to rise in order to be able to keep the system running. Eventually if demand drops enough, the system will shed fixed costs by closing plant, etc, but this tends to be rather sticky and comes in big lumps at long time intervals.

  7. Thank Labour and Roger Douglas.

  8. Naki man 8

    I don’t know what all the fuss is about. My power bill is just over $100 a month this time of year. A little more than my internet bill and less than a tank of petrol.
    If you own the house you live in and think you are paying too much it is very easy to reduce your bill, unfortunately not so easy if you are renting.

  9. cleangreen 9

    I have been finishing two other recent studies and the stats now show we are being ripped off no fear here.

    Since the 2014 world bank study, we have decreased our own use of power every year since, we found the stats show.

    Our use has fallen since 2014 again to less than average of 8939kWe per individual annually from 9026 in 2014.

    So clearly we are really being ripped off alright by these fat cats running our formerly ‘public owned power companies using the excuse that power generation is lagging behind ouur demand as it has not incresed since 2014..

    Shame on them!!!!

    • Tuppence Shrewsbury 9.1

      consumption dropping does not equal a price drop. Please publish your study so we can assess your conclusions

  10. KJT 10

    One aspect that hasn’t been mentioned, is power companies overcharging retail customers, to finance their discounts to attract large businesses.

    Power is a case study, on the inefficiencies of “privatisation” and ” competition” in large essential infrastructure.

    And a total refutation of the raving that “private companies are always better than State control”.

    • RedLogix 10.1

      I agree with you on that totally. I recall from some years back a study done that compared the network costs between the electricity system and the water system in Wellington, and what happened in the decade after privatisation of the former, while the water supply remained public.

      I forget the exact numbers, but the water system real costs rose about 18% in that time, while the electricity sector rose something like 170%. Someone bite me if I have those numbers wrong, but the difference was stark. I recall linking to the document years back.

    • Andre 10.2

      One aspect that hasn’t been mentioned, is power companies overcharging retail customers, to finance their discounts to attract large businesses.

      Yup. The Electricity Retailers Association says so themselves, though they put marketing weasel spin on it.

      https://www.eranz.org.nz/fileadmin/user_upload/ERANZ-_electricity_prices_in_NZ_-_an_historical_and_current_context_-_June_2017.pdf

  11. A 11

    I remember that I moved out of Lower Hutt just before the cut off for being considered a resident and therefore owner of some power co. Missed out on over a grand in payout.

    Made me think we needed more people owned power co’s

  12. WeTheBleeple 12

    I’ve been thinking about this. Possibly cause a war…

    Private companies gouge profit. We know this no matter how pretty their PR folks are.

    I propose we claw the power companies back and force these private players in line with fair practice and public service provision. Power in NZ is a basic necessity not a luxury.

    Buy them out, one chunk at a time taking their shares and turning them back to NZ’s asset as they are meant to be.

    Force their pricing to stop them over-inflating their sense of worth.

    Force their maintenance to stop them stalling business and activity.

    Force them to act like responsible business till all the opportunists have abandoned ship.

    • Stuart Munro. 12.1

      Agreed. One of my NZ power bills would pay for a year’s power in Korea, with change left over. NZ power companies are taking the piss.

      • CLEANGREEN 12.1.1

        Yes WeTheBleeple and Stuart,

        My Son is living back in Germany, and pays only a third of our cost of our power bill here for us two, – at his home there.

        Considering he and his fiance’ is in a deep winter period there now, and we are in a far warmer period here.

        So for our winter; – it will be of cold comfort knowing that Germany’s power costs are far less than ours, is ‘criminal’ for us to be forced to face here.

        Especially since I spend my best years working on two large power schemes in NZ building public hydro power projects so our future would be sure with cheap power.

        What a ripoff!!!!!

        We have been robbed here in NZ by these overseas “leeches”.

        • Dukeofurl 12.1.1.1

          In Europe I think its only France that is similar to NZ in that electricity supplies the majority of home energy use.
          I know for UK most homes have natural gas for home heating and hot water , the ubiquitous ‘boiler’ tucked away somewhere, anmd maybe even the stove is gas. This way their electricity usage is a small part of their energy use.
          Germany may be the same as UK , so perhaps ask your Son about the natural gas – maybe its part of an apartment block that shares the heating via radiators , so electricity may only be lighting and home electronics ?

          The comments from Ballarat may also rely on natural gas , for heating, hotwater and stove. More recently electricity prices in Victoria have soared as the move to more renewable forms has replaced old brown coal ( the worst kind) of power stations

          • cleangreen 12.1.1.1.1

            Germany uses electric ranges mainly (my son a NZ master electrician said).

            They also use electric underfloor heating systems too.

            I lived in Canada for 3 decades on and off, owning three properties and all had “forced gas griddle heated air heating systems: which were bloody dangerous.
            Our system of good insulation with ‘wool’ is adequate for our mild climate also.

            • Dukeofurl 12.1.1.1.1.1

              “Gas central heating is the most widely used type of heating system in Germany. ”
              https://www.wolf.eu/en/advice/heating/gasheatingsystem/

              My household of two probably averages $100 pm over year and I have two heat pumps, the upstairs one is mostly used for cooling over summer nights – using dehumidify option as thats the problem , humidity rather than excessive hot.
              My annual consumption 3813 kWh ,year on last Aug, means Im at the low end of a ‘low user’, but have the usual washing machines and dishwashers etc. I take care to turn major appliances off at the wall after use, including computer gear

              • Dukeofurl

                “A typical household buying from a local supplier that consumes 5,000 kilowatt hours a year is now paying 1,437 euros per annum”
                https://www.reuters.com/article/us-germany-energy-retail/german-consumers-paying-record-prices-for-power-portal-idUSKCN1P9233

                Thats maybe twice ($2350 ? )what I pay($1071) for a similar kWhr

                Thats ALL my household energy , while those in Germany are mostly paying extra for natural gas heating on top of 5000 kWhr – which is quite low

              • cleangreen

                Many countries have electricity prices at least half or much less than ours.are now because the base price is high here by extra ‘taxes’ and ‘ripping us off’ by using extra line and transmission charges and metering equipment charges are ‘silently added by the power company’ like NZ companies has done so now.

                Note; some are out of date as NZ and Australia are but we can use them for comparisons from then to now as historic references.

                Try NZ in 2012 cost of average power per kW was around 19c and now we are now up to 35c in areas such as Gisborne rural areas are.

                Germany has high kW cost of (33 EU) – but my Son says their yearly cost now in Germany is lower by far than ours are even today in 2019.

                I commend Dukeofoul for keeping his/hers average monthly kWs down to “averages $100 pm over year ” That is amazingly low even for two.

                Here are some stats to prove this fact that many countries have far lower cost than we or Australia has so knowing that the same global folks operate the Australian electrical providers do so in NZ now, so we need to have these high cost companies investigated for corrupt practices now.

                Argentina 9 2016
                Australia 11-26 2016
                Belgium 27 2015
                Bulgaria 11 2015
                Brazil 12-25 2016
                Canada 8-16 2016
                China 5-14 2016
                Chile 23.11 2011
                Croatia 15 2015
                Czech Republic 14.75 2015
                Denmark 33 2015
                Finland 17.51 2015
                France 19.23 2015
                Germany 33.76 2015
                Guyana 26.8 2012
                Hungary 23.44 2011
                Hong Kong 12.02-24 2013
                India 7 2014
                Indonesia 8.75 2013
                Iceland 14.5 2015
                Iran 2-19 2011
                Ireland 28.36 2011
                Israel 15.35 2017
                Italy 28 2015
                Jamaica 7.35-16.8 2011
                Japan 18 2015
                Jordan 5-33 2012
                Latvia 18.25 2012
                Malaysia 7.09-14.76 2013
                Mexico 19.28 2012
                Moldova 11.11 2011
                Netherlands 28.89 2011
                New Zealand 19.15 2012
                Pakistan 2-18 2015
                Papua New Guinea 29 2013
                Paraguay 8 2011
                Peru 10.44 2007
                Philippines 30.46 2010
                Portugal 25.25 2011
                Russia 9 2014
                Serbia 3.93-13.48 2013
                Singapore 21.53 2013
                Spain 19.72 2017
                Solomon Islands 84.8 2013
                South Africa 15 2015
                South Korea 8.1-62 2016
                Sweden 21.5 2015
                Taiwan 7-17 2012
                Thailand 4.46-9.79 2011
                Tonga 57.95 2011
                Turkey 11.2 2016
                United Kingdom 25 2015
                Ukraine 2.6-10.8 2014
                Uruguay 17.07-26.48 2014
                United Arab Emirates 0-12 2017
                United States 12.7 2017
                USA Virgin Islands 51-55 2013
                USA Hawaii 30.33 2017
                Uzbekistan 4.95 2011
                Vanuatu 58 2013
                Vietnam 6.20-10.01 2011

                • Dukeofurl

                  Based on my numbers German electricity prices are ‘twice’ that of a low user in Auckland ( How is their GST?)
                  Yes some rural areas here have very high lines charges

                  My only ‘trick’ is to have the hot water turned off except for 51 min per day -yes I use a timer- before the morning showers. In winter it goes up to around 80 min. In theory it shouldnt make much difference but I found it did. ( water comes from the hot part of the cylinder – the top- while cold water comes in the bottom where the thermostat is and immediately turns the element on to mix the water. I just have enough water used so that the cold water stays at the bottom till the next day)

                  I can remember years ago being surprised by people who left electric heaters on in rooms all night!
                  To me the main thing was a warm dry bed , by using an electric blanket before going to sleep. And about once a fortnight or so leaving it on very low setting for say 4-5 hours to drive the moisture out of the bed. damp beds require more heating.

                  • cleangreen

                    They stupidly got rid of the ‘ripple relay system’ of the ‘controlled’ side of all home electricity systems sadly.

                    We had always included them in distribution boxes attached to all homes then to restrict overnight water heating when high line demand was present so we had a lower water electricity charge in all homes where some would connect their heaters to the “controlled side of the electricity supply.

                    As an electrician i was amazed when a Contact energy guy suggested we do this.

                    All power providers should offer any service that would lower customers costs also like this.

                  • cleangreen

                    Dukeofurl; My son just emailed his thoughts on the German prices here,;-

                    “30 cents euro per kWh, that’s gone up from 25 cents since 2010. We generally only use electricity for cooking, I’ve never actually come across any house that hasn’t!
                    They use a central heating system which the water heating is tied in with and the main source of heating are natural gas boilers, heat pumps, district heating system which means they have heating plants supplying heat (biomass and coal plants), and also wood and wooden pallet based heating systems

                    We also pay our power annually. So 750-1450 euros a year
                    I’ve generally only paid 750-1000euros a year.”

                    We here average $250NZ a month (a lot more than you do) as you are wisely using less power than most.

                    I need electricity here due to severe allergies to gas or wood fire emissions.

                    We do use much more cost then my son and his partner do in Germany.

                    Canada was much cheaper than NZ or Germany at only 12 cents a kWh. US at 11 cents so we are very high here.

                  • Andre

                    Do you occasionally make sure the whole cylinder gets up to at least 60 degrees? If not, then the risk goes way up of cultivating a delightful little colony of Legionnaire’s disease in your hot water cylinder.

      • RedLogix 12.1.2

        Similar experience even in Australia. I remember my shock at our first power bill in Ballarat, it was was similar to the ones we got in NZ, except it covered a whole quarter, not one month!

    • Jess NZ 12.2

      Yes, socialist of me I know, but I think that utilities required for civilised living should be nationalised, not privatised. The profit motive increases the already immoral divide between rich and poor in NZ.

      So power, water, transport, health and ‘communications’ should all be free of the profit requirement.

      Rich people will always be able to buy a better deal, but the rest of us shouldn’t be propping up already rich investors.

  13. WeTheBleeple 13

    Yeah we’re certainly getting gouged aye. Maybe part of it is due to having a smaller consumer base, but not all of it.

    To ensure good (renewable hydro) power supply in our future we will also need to address the retention of water in our landscapes. Not only to ensure power supply, but for stream health and life, and primary production – our biggest earner.

    The way all of this fits together where conservation enhances power and economy is the type of opportunity we should keep our eyes open for.

    Building resilience in our systems.

    NZ Forever.

  14. Herodotus 14

    Simon your story is very similar to mine, had a 24 month price freeze. Recently the 24 mth period lapsed. We received a letter stating that all rates: Fixed and variable were to be “lifted” by 22-34%. From visiting http://www.switchme.co.nz i was able to find a supplier that was able to match our rates from 2 years ago. 4 days after completing the process I was rung from the current power coy with a counter offer, like you offering a dramatic lower rate and as a goodwill gesture $300 credit on the account. I used this opportunity to voice my frustration and from principle did not accept their offer.
    I wonder how many “passive” customers these coys have that just accept such increases.
    Wasn’t the power shake up to benefit the consumer ??? 🥴
    Should have purchased all those shares that our govt sold a few years ago 🤑

  15. Slijmbal 15

    Must agree with the point made earlier that while there is competition it is not provided to the consumer as a natural consequence, rather it has to be quite actively sought out. We have the cosmetic appearance of a competitive market but not an actual one.

    Electricity costs have 3 main components; generation, transport (Transpower) and ‘retail’. Haven’t been able to dig out what proportion of our costs are in each but from memory all 3 components are major contributors to the cost.

    The government owns ~ 2/3rd of power generation and owns Transpower and the 5 main generators who generate almost all power in NZ are also the 5 main retailers (with less domination than in generation but still a large amount of market share – I don’t have numbers to hand). This certainly looks like a cartel. A Government owned one.

    We also have a pricing model for wholesale prices that is poorly constructed that can easily be gamed by the generators to increase profit. Furthermore, we have a poor model of setting how much profit the electricity companies are allowed. In crude terms it is priced by valuing their assets, setting an acceptable level of return on these assets and then being able to set prices accordingly. Getting assets artificially increased in value allows a corresponding increase in price and thus profit.

    Ironically, with majority government ownership and government set rules for profit and pricing this is actually a government caused problem and not a private industry one IMO. Even more ironically, the largest proportion of price hikes (%age wise) have been applied under Labour governments. National are also guilty of this behaviour, just not as much. It’s been treated as a stealth tax by governments for ~ 20 years.

    Electricity supply has so many built in impediments to competition e.g. very high capital costs and easy to repel new entries to the market, it’s not sensible to have 2 Transpowers etc. etc. that competition can only be enforced by market intervention. I worked in the electricity industry prior to de-regulation and wasn’t impressed by what I saw then so I’m not in favour of nationalisation and would rather fix what we have than overturn it. I don’t see any government intervening soon as it will mean increased taxes elsewhere.

    On a final note, this will only get worse with moves around removal of fossil fuels in the mix as it’s become much more difficult to create economically reasonable, renewable generation in NZ. For instance, Hydro requires new damns, which are invariably strongly opposed. Other renewables such as wind and solar are not even close to economically competitive and a long way from being so, if ever, in the New Zealand environment.

  16. cleangreen 16

    Slijmbal

    Excellent review you made.

    I have a company that works within the Electricity industry in a “partnership” with the Electricity Authority (EA) as an (MEP) ‘Meter Equipment Provider’ and also as a (MEO) ‘Meter Equipment Owner’ where my activities are all controlled by the EA and often our similar companies that are small like ours are discriminated against by the Power providers and we are unable to supply services to customers that they want as the power providers will not allow us to represent the consumer to carry out installations of our equipment which can save the consumer money in lower bills.

    So yes there are anomalies in the electricity industry now and the potential for some electricity providers to ‘play’ the system to reach higher profits with to much power given to the electricity providers over consumers rights to choose there services offered inside the electricity equipment industry.

    We have on several times provided our company input submissions to the EA but seldom has anything changed.

    We hope that the tenacious excellent prowess of our new Energy Minister Megan Woods will correct those issues and give consumers better right to use their preferred Meter equipment Provider to supply better metering to give the consumer lower bills, as some electronic digital metering is known to be very unstable whereas the older mechanical ‘ferraris’ spinning wheel’ metering that has been used for 60+ years has proven to be is more accurate in most climatic conditions.

    Most Electricity Providers will also benefit from a more reliable stable reading of use at every location without having to deal with customers disputes also.

    Main benefits also are for property owners with solar backup power systems as these mechanical spinning wheel meters reverse the reading when power from the home is generated and returned to the grid is shown accurately as a credit of 100% back to the homeowner by debiting the power returned to the grid.

    Simply this give will give more control of use and lowed bills back to the customer.

  17. hoom 17

    I will never forget Max Bradford on the day he announced the splitting of ECNZ:
    “NZ electricity prices will never be as low as today”

    It was a Bushism but has been proven absolutely literally true, prices nearly immediately rose significantly and continued inexorably upward since.

    What annoys me is we had 9 years of Labour with no real improvement to what was already very clearly a broken-to-the-core system in that time.

    I see no sign that this Labour govt will do anything other than a minimal & ineffectual adjustment round the edges.

    A ‘market’ setup to always choose the most expensive price is not a market, its a Cartel.
    And it makes no sense for separate companies owned by the Govt to be run as a Cartel. (nor as an actual market)

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  • Apartments give new life to former Trade Training hostel
    A building that once shaped the Māori trade training industry will now revitalise the local community of Ōtautahi and provide much needed housing for whānau Minister for Māori Development Willie Jackson announced today. The old Māori Trade Training hostel, Te Koti Te Rato, at Rehua Marae in Christchurch has been ...
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    17 hours ago
  • Major step to pay parity for early learning teachers
    Certificated teachers on the lowest pay in early education and care services will take another leap towards pay parity with their equivalents in kindergartens, Education Minister Chris Hipkins said in a pre-Budget announcement today. “Pay parity for education and care teachers is a manifesto commitment for Labour and is reflected ...
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    17 hours ago
  • New Zealand Wind Energy Conference
    Tēnā koutou katoa Tēnā koutou i runga i te kaupapa o te Rā No reira, tēnā koutou, tēnā koutou, tēnā tatou katoa  Thank you Grenville for the introduction and thanks to the organisers, the New Zealand Wind Energy Association, for inviting me to speak this morning. I’m delighted that you ...
    BeehiveBy beehive.govt.nz
    19 hours ago
  • Speech to New Zealand Drug Foundation 2021 Parliamentary Drug Policy Symposium
    Speech to Through the Maze: On the road to health New Zealand Drug Foundation 2021 Parliamentary Drug Policy Symposium Mōrena koutou katoa, Tēnei te mihi ki a koutou, Kua tae mai nei me ngā kete matauranga hauora, E whai hononga ai tatau katoa, Ka nui te mihi! Thank you for the opportunity ...
    BeehiveBy beehive.govt.nz
    21 hours ago
  • Govt to deliver lower card fees to business
    Commerce and Consumer Affairs Minister David Clark has today announced the Government’s next steps to reduce merchant service fees, that banks charge businesses when customers use a credit or debit card to pay, which is estimated to save New Zealand businesses approximately $74 million each year. “Pre COVID, EFTPOS has ...
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    21 hours ago
  • Government support boosts Arts and Culture sector
    Government support for the cultural sector to help it recover from the impact of COVID-19 has resulted in more cultural sector jobs predicted through to 2026, and the sector performing better than forecast. The latest forecast by economic consultancy ‘Infometrics’ reflects the impact of Government investment in keeping people in ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Govt takes further action against gang crime
    The Government will make it illegal for high risk people to own firearms by introducing Firearms Prohibition Orders (FPOs) that will strengthen action already taken to combat the influence of gangs and organised crime to help keep New Zealanders and their families safe, Police Minister Poto Williams and Justice Minister ...
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    2 days ago
  • Thousands of MIQ spaces allocated to secure economic recovery
    Five hundred spaces per fortnight will be allocated in managed isolation facilities over the next 10 months, many for skilled and critical workers to support our economic recovery, COVID-19 Response Minister Chris Hipkins and Agriculture Minister Damien O’Connor say. “The Trans-Tasman bubble has freed up more rooms, allowing us to ...
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    3 days ago
  • New Zealand Sign Language Week a chance to recognise national taonga
    This week (10 – 16 May 2021) is New Zealand Sign Language Week (NZSL), a nationwide celebration of NZSL as an official language of New Zealand. “We’re recognised as a world leader for our commitment to maintaining and furthering the use of our sign language,” says Minister for Disability Issues ...
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    3 days ago
  • Economic resilience provides more options in Budget 2021
    Securing the recovery and investing in the wellbeing of New Zealanders is the focus of Budget 2021, Grant Robertson told his audience at a pre-budget speech in Auckland this morning. "The economy has proven resilient in response to COVID-19, due to people having confidence in the Government’s health response to ...
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    3 days ago
  • Pre-Budget speech to BNZ-Deloitte Auckland Breakfast Event
    Thank you for the invitation to speak to you today, and to share with you some of the Government’s thinking leading into this year’s budget. This will be my fourth time delivering the annual Budget for the Government, though the events of the past year have thrown out that calculation. ...
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    3 days ago
  • Rotuman Language week affirms language as the key to Pacific wellbeing
    The first Pacific Language Week this year  makes it clear that  language is the key to the wellbeing for all Pacific people said Minister for Pacific Peoples, Aupito William Sio. “This round of language  weeks begin with Rotuman. As I have always  said language is one of the pillars of ...
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    4 days ago
  • Budget delivers improved cervical and breast cancer screening
    Budget 2021 funds a more effective cervical screening test to help reduce cervical cancer rates A new breast screening system that can proactively identify and enrol eligible women to reach 271,000 more people who aren’t currently in the programme. Budget 2021 delivers a better cervical screening test and a major ...
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    4 days ago
  • NZ-France to co-chair Christchurch Call Leaders’ Summit
    New Zealand and France will jointly convene the Christchurch Call Community for a leaders’ summit, to take stock of progress and develop a new shared priority work plan. Prime Minister Jacinda Ardern and President Emmanuel Macron will co-chair the leaders’ meeting on the 2nd anniversary of the Call, on 14 ...
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    4 days ago
  • New South Wales travel pause to be lifted tomorrow
    COVID-19 Response Minister Chris Hipkins says the current travel pause with New South Wales will lift tomorrow – subject to no further significant developments in NSW. “New Zealand health officials met today to conduct a further assessment of the public health risk from the recently identified COVID-19 community cases in Sydney. It has been determined that the risk to public ...
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    5 days ago
  • March 15 Collective Impact Board appointed
    The voices of those affected by the March 15 mosque attacks will be heard more effectively with the establishment of a new collective impact board, Associate Minister for Social Development and Employment Priyanca Radhakrishnan announced today. Seven members of the Christchurch Muslim community have been appointed to the newly established Board, ...
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    5 days ago
  • More young Kiwis supported with mental health and addiction services
    Nearly quarter of a million more young New Zealanders will have access to mental health and addiction support in their communities as the Government’s youth mental health programme gathers pace. New contracts to expand youth-specific services across the Northland, Waitematā and Auckland District Health Board areas have been confirmed, providing ...
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    6 days ago
  • New hospital facilities mean fewer trips to Auckland for Northlanders
    Northlanders will no longer automatically have to go to Auckland for lifesaving heart procedures like angiograms, angioplasty and the insertion of pacemakers, thanks to new operating theatres and a cardiac catheter laboratory opened at Whangārei Hospital by Health Minister Andrew Little today. The two projects – along with a new ...
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    6 days ago
  • Fair Pay Agreements to improve pay and conditions for essential workers
    The Government is delivering on its pre-election commitment to implement Fair Pay Agreements which will improve wages and conditions, as well as help support our economic recovery, Workplace Relations and Safety Minister Michael Wood announced today. Fair Pay Agreements will set minimum standards for all employees and employers in an ...
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    6 days ago
  • Establishment of the new Māori Health Authority takes first big step
    Sir Mason Durie will lead a Steering Group to provide advice to the Transition Unit on governance arrangements and initial appointments to an interim board to oversee the establishment of the Māori Health Authority. This Group will ensure that Māori shape a vital element of our future health system, Minister ...
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    6 days ago
  • Cycle trails move up a gear in Central
    Work on new and upgraded cycle trails in Queenstown, Arrowtown and Central Otago is moving up a gear as two significant projects pass further milestones today. Tourism Minister Stuart Nash has announced new funding for the Queenstown Trails Project, and will also formally open the Lake Dunstan Trail at Bannockburn ...
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    6 days ago
  • Government gives households extra help to reduce their power bills
    Nine community energy education initiatives to help struggling New Zealanders with their power bills are being given government funding through the new Support for Energy Education in Communities (SEEC) Programme.   “Last year we committed nearly $8 million over four years to establish the SEEC Programme. This funding will help ...
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    6 days ago
  • Picton ferry terminal upgrade consent fast-tracked
    The planned upgrade of the Waitohi Picton Ferry terminal has been approved under the fast-track consenting process.  Environment Minister David Parker today welcomed the decision by the expert consenting panel to approve the Waitohi Picton Ferry Precinct Redevelopment Project.    The project will provide a significant upgrade to the ferry facilities ...
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    7 days ago
  • Quarantine Free Travel with New South Wales paused
    COVID-19 Response Minister Chris Hipkins has announced his intention to pause Quarantine Free Travel from New South Wales to New Zealand while the source of infection of the two cases announced in Sydney in the last two days is investigated.  Whole genome sequencing has linked the case yesterday to a recent ...
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    7 days ago
  • Covid-19 immigration powers to be extended
    The passing of a bill to extend temporary COVID-19 immigration powers means continued flexibility to support migrants, manage the border, and help industries facing labour shortages, Immigration Minister Kris Faafoi said. “Over the past year, we’ve made rapid decisions to extend visas, vary visa conditions and waive some application requirements ...
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    7 days ago
  • “Supporting a Trade-Led Economic Recovery”
    Trade Policy Road Show SpeechManukau, Auckland   Kia ora koutou – nau mai, haere mai ki Manukau, ki Tāmaki.   Good morning everyone, and thank you for this opportunity to discuss with you current global challenges, opportunities and the Government’s strategy in support of a trade-led recovery from the economic ...
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    7 days ago
  • Building consent numbers at an all-time high
    A record 41,028 new homes have been consented in the year ended March 2021 March 2021 consent numbers the highest since the 1940s Record number of new homes consented in Auckland The number of new homes consented is at an all-time high, showing a strong and increasing pipeline of demand ...
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    7 days ago
  • Whānau-centred support for parents and tamariki
    Up to 60 whānau in Counties Manukau will be supported through the first three years of their parenthood by a new whānau-centred model of care, said Associate Health Minister, Hon Aupito William Sio. “Providing this support to young parents is something we have to get right. It’s a priority both ...
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    7 days ago
  • NZ backs moves to improve global access to COVID vaccines
    New Zealand welcomes and strongly supports the announcement made by the United States Trade Representative to work for a waiver of IP protections on COVID-19 vaccines at the WTO, Trade Minister Damien O’Connor said. “New Zealand supports equitable access to COVID vaccines for all. No one is safe from the ...
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    7 days ago
  • Tourism communities: support, recovery and re-set plan
    TIHEI MAURI ORA Tuia te whakapono Tuia te tumanako Tuia te aroha Tuia te hunga ora Ki te hunga ora Tihei Mauri ora Ka nui te mihi ki a koutou Tena koutou, tena koutou, tena koutou katoa. Thank you, Hilary and thank you, Chris, and everyone at TIA for this ...
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    7 days ago
  • Support, recovery and re-set plan for tourism communities
    Five South Island tourist communities targeted for specialist support Pressure on Māori tourism operators and Conservation facilities recognised Domestic and international-facing tourism agencies put on more secure footing Long-term plan to re-set tourism with a focus on sustainability, industry standards and regional economic diversification A plan to ensure the immediate ...
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    7 days ago
  • Speech on NZ Rail Plan
    Check against delivery E ngā mana, e ngā reo, e ngā karanga maha o te wa, tēnā koutou, tēnā koutou, tēnā tātou katoa. Ki ngā mana whenua o Taranaki Whānui anō nei aku mihi ki a koutou. Nōku te hōnore kia haere mai ki te whakanuia tēnei huihuinga whakahirahira. Nō ...
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    7 days ago
  • Government hits massive milestone in Violence Prevention & Elimination
    Minister for Family and Sexual Violence Marama Davidson announced a major milestone at a hui in South Auckland today, with the launch of the national engagement process on the prevention and elimination of family and sexual violence. “There is no room for violence in our lives – there is no ...
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    7 days ago
  • Fee waiver extended for conservation tourism businesses
    Tourism businesses operating on public conservation land will have another six months of fees waived to help them adjust to the downturn in international visitors in the wake of the COVID-19 pandemic, Acting Minister of Conservation Dr Ayesha Verrall has announced. "We acknowledge it has been a difficult year for ...
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    7 days ago
  • ‘Lua Wave’ to future-proof Pasifika Festivals in Aotearoa
    Pasifika festival organisers will receive additional support to adapt to the COVID-19 environment thanks to the Government’s newly launched ‘Lua Wave’ component of the Pasifika Festivals Initiative, Minister for Arts, Culture and Heritage Carmel Sepuloni announced today. “This initiative has not only been to support festival organisers to recover from ...
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    7 days ago
  • Crown accounts show confidence in Govt economic plan
    The Government’s financial accounts continue to reflect the resilience of the economy and confidence in the Government’s economic recovery plan. The Crown accounts for the nine months to the end of March 2021 show both OBEGAL and the operating balance remain better than forecast in the Half Year Economic and ...
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    7 days ago
  • Energy Trusts of NZ Autumn Conference
    It’s a pleasure to be here today. Thank you Karen [Sherry] for the introduction and thanks to the Energy Trusts Executive for inviting me to speak at tonight’s event. It is an exciting time to come to speak to trustees of distribution companies. For many decades the electricity industry was ...
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    7 days ago
  • New partnership to grow Māori success in STEM
    A new partnership with the Pūhoro STEM Academy will support thousands more rangatahi Māori to participate and succeed in the fields of science, technology, and innovation, Associate Education Minister Kelvin Davis announced today. Since 2016, Pūhoro has worked with Māori students to build their capability and create pathways to employment ...
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    7 days ago
  • Rail builds platform for economic recovery
    Transport Minister Michael Wood and State-Owned Enterprises Minister Dr David Clark today released the Government’s long term vision for a sustainable rail network that supports our economic recovery. New Zealand Rail Plan lays out how the Government is building a resilient, reliable and safe network, as well as the indicative ...
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    7 days ago
  • NZ and UK agree to lift the pace of free trade talks
    New Zealand and the United Kingdom have agreed to rapidly lift the tempo of talks, as the two countries enter a new phase in free trade negotiations, Trade and Export Growth Minister Damien O’Connor announced today. “UK Secretary of State for International Trade, Liz Truss, and I spoke today about ...
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    1 week ago