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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  • CTU speech – DPM
    Ladies and gentlemen, NZCTU President Richard Wagstaff, members of respective unions – thank you for the invitation to speak to you today. This might be preaching to the choir, but the importance of trade unions in New Zealand’s historical arch is difficult to understate. And it is my belief that ...
    BeehiveBy beehive.govt.nz
    7 hours ago
  • Police Association Annual Conference
    "Let’s start by acknowledging that it has been a huge year. " Police Association Annual Conference James Cook Grand Chancellor Hotel Wellington Nau mai, haere mai. Tēnā koutou, tēnā koutou, ka nui te mihi, ki a koutou katoa. President of the Police Association, Chris Cahill; Members of the Association and ...
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    8 hours ago
  • New Zealand announces a further P-3 deployment in support of UN sanctions
    Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark have announced the New Zealand Government’s decision to again deploy a Royal New Zealand Air Force P-3K2 (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea. New ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • New Zealand deeply concerned at developments in north-east Syria
    Foreign Affairs Minister Winston Peters says New Zealand continues to have serious concerns for peace and stability in north-east Syria. “Recent reports that hundreds of ISIS-affiliated families have fled from a camp are deeply concerning from a humanitarian and security perspective”, Mr Peters says. “While we acknowledge Turkey’s domestic security ...
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    11 hours ago
  • Government on high alert for stink bugs
    Biosecurity Minister Damien O’Connor is warning travelling Kiwis to be vigilant as the high-season for the crop-eating brown marmorated stink bug (BMSB) is under way. “We’re on high alert to stop BMSB arriving in NZ. The high season runs until April 30 and we’ve strengthened our measures to stop stink ...
    BeehiveBy beehive.govt.nz
    12 hours ago
  • Better protections for students in halls of residence
    The Government is moving swiftly to change the law to improve the welfare and pastoral care of students living in university halls of residence and other tertiary hostels. Cabinet has agreed to several changes, including creating a new mandatory Code of Practice that sets out the duty of pastoral care ...
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    1 day ago
  • New trapping guide for community and expert trappers alike
    The Minister for Conservation Eugenie Sage has launched a new comprehensive trapping guide for community trappers to help them protect our native birds, plants and other wildlife, at Zealandia in Wellington today. ‘A practical guide to trapping’, has been developed by the Department of Conservation (DOC), and was launched during ...
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    1 day ago
  • Widening Access to Contraceptives Welcomed
    Associate Health Minister Julie Anne Genter welcomes PHARMAC’s move to improve access to long-acting reversible contraception (LARCs). PHARMAC has today announced it will fund the full cost of Mirena and Jaydess for anyone seeking long term contraception, lifting previous restrictions on access to Mirena. “I welcome women having greater choices ...
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    1 day ago
  • Major upgrade for Taranaki Base Hospital
    The Government has approved the next stage of a major redevelopment of Taranaki Base Hospital, which will deliver new and improved facilities for patients. Health Minister Dr David Clark has announced details of a $300 million dollar project to build a new East Wing at the New Plymouth hospital. It ...
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    2 days ago
  • Extra support for rural families
    Extra funding will allow Rural Support Trusts to help farming families, says Minister for Rural Communities and Agriculture Damien O’Connor. “I know that rural families are worried about some of the challenges facing them, including the ongoing uncertainty created by the Mycoplasma bovis outbreak. “Those concerns sit alongside ongoing worries ...
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    3 days ago
  • Howard Leaque Beekeeper programme graduation
    Thank you for the opportunity to be here to present certificates to the 16 graduates who have completed a beekeeping course delivered by the Howard League.  Let us start by acknowledging Auckland Prison’s Deputy Prison Director Tom Sherlock, and Acting Assistant Regional Commissioner of Corrections Northern Region Scott Walker - ...
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    4 days ago
  • Finance Minister to attend APEC meetings
    Finance Minister Grant Robertson leaves this weekend to attend the APEC Finance Ministers meeting in Santiago, Chile. Discussions between APEC Finance Ministers at the meeting will include the effects of the current global economic uncertainty, risks for APEC economies and sustainable development of the region. While at APEC Grant Robertson ...
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    4 days ago
  • Pacific languages are a source of strength, they ground us and build confidence
    The Minister for Pacific Peoples Aupito William Sio says for Pacific people, language can be a source of strength. It can help ground us and give us confidence. When we speak them, our languages provide us with an immediate and intimate access to our identity and our story - and ...
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    4 days ago
  • Major boost to support disabled people in sport and recreation
    The Coalition Government has announced an action plan to improve the wellbeing of disabled New Zealanders by addressing inequalities in play, active recreation and sport. The initiative includes training to develop a workforce that understands the needs of children and young people with a range of impairments, advocacy for fit ...
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    4 days ago
  • More prefab homes to be built as red tape cut
    The construction sector is being freed up to allow more homes to be built more quickly as the Government cuts through some of the red tape of the Building Act.  “Every New Zealander deserves a warm, dry, safe home and old inefficiencies in the Building Act make building slow and ...
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    4 days ago
  • Further details of Prince of Wales and Duchess of Cornwall visit to New Zealand
    Prime Minister Jacinda Ardern has welcomed further details on the Prince of Wales and Duchess of Cornwall’s visit to New Zealand next month. Their Royal Highnesses will visit New Zealand from 17-23 November – their third joint visit to New Zealand and first in four years. They arrive in Auckland ...
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    4 days ago
  • O’Connor in Thailand to push for RCEP deal
    Minister of State for Trade and Export Growth and Minister of Agriculture, Damien O’Connor, heads to Thailand today to attend the final Regional Comprehensive Economic Partnership (RCEP) Ministerial meeting, as negotiations enter their final stages. “The RCEP Agreement would anchor New Zealand in a regional agreement that covers 16 countries, ...
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    4 days ago
  • Young Pacific people can access earning and learning opportunities in Hawke’s Bay, Otago and South...
    Pacific young people living in the Hawke’s Bay, Southland and Otago regions will have access to support services that have proved successful in helping young people find new earning and learning opportunities. “Tupu Aotearoa is about changing Pacific young peoples’ lives. Our young people are talented, they are smart, they ...
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    5 days ago
  • Protecting wellbeing – ACC HQSC Trauma Forum
    Introduction As the Minister for ACC I thank you all for the work that you do supporting New Zealanders in their literally most vulnerable moments. From those who hold people’s lives in their hands, to the people who research technique, technology and trends, your work is highly valued. A special ...
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    5 days ago
  • NZ economy in good shape – notes prepared for speeches in Christchurch
    Notes prepared for speeches in Christchurch – Wednesday 9 October 2019 Today’s topic, “trends and opportunities for the New Zealand economy,” is certainly one getting a great deal of commentary at the moment. Looking across the media landscape lately you’ll notice we aren’t the only ones having this discussion. There ...
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    5 days ago
  • World Mental Health Day a reminder of the importance of mental health work
    Minister of Health Dr David Clark and Associate Minister of Health Peeni Henare say this year’s World Mental Health Day theme is a reminder of why the Government’s work on mental health is so important. “This year the World Federation for Mental Health has made suicide prevention the main theme ...
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    5 days ago
  • Cultural Ministers Meeting
    Associate Arts, Culture and Heritage Minister Carmel Sepuloni will represent the government at Australia’s Meeting of Cultural Ministers in Adelaide this week. “This year’s meeting is special because New Zealand is expected to become an International Member of the Meeting of Cultural Ministers at this Australian forum,” Carmel Sepuloni said. “The meeting is an opportunity to ...
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    6 days ago
  • 608 claims resolved by GCCRS in first year
    The Greater Christchurch Claims Resolution Service has resolved 608 insurance and EQC claims in its first year in operation, Minister Megan Woods has announced. The government service, which celebrates its first birthday today, provides a one stop shop to help Cantabrians still battling to get their homes repaired or rebuilt ...
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    6 days ago
  • NZ economy in good shape
    Today’s topic, “trends and opportunities for the New Zealand economy,” is certainly one getting a great deal of commentary at the moment. Looking across the media landscape lately you’ll notice we aren’t the only ones having this discussion. There has been an increasing amount of attention paid to the outlook ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • NZTA to refocus on safety following review
    The Government is acting swiftly to strengthen NZTA’s regulatory role following a review into the Transport Agency, and Ministry of Transport’s performance as its monitor, Transport Minister Phil Twyford said today. An independent review by Martin Jenkins has found NZTA failed to properly regulate the transport sector under the previous ...
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    6 days ago
  • Joint Cooperation Statement on Climate Change between the Netherlands and New Zealand
    The Netherlands and New Zealand have a long-standing and close relationship based on many shared interests and values. We value the rule of law, our democracies, and multilateralism.  And we value our environment – at home and globally. Right now there are major global challenges in all of these areas – ...
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    1 week ago
  • Government putting right Holidays Act underpayment in Health
    The Government is putting right a decade’s worth of underpayment to nurses, doctors and other health workers, says Health Minister Dr David Clark.  Initial sampling of District Health Boards payroll records has found that around $550-$650 million is owed to DHB staff to comply with the Holidays Act. It’s expected ...
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    1 week ago
  • Government accounts show strong economy
    A strong surplus and low debt show the economy is performing well, and means the Government is in a good position to meet the challenges of global economic uncertainty. “The surplus and low levels of debt show the economy is in good shape. This allows the Government to spend more ...
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    1 week ago
  • Ministers approve application to expand Waihi mine
    New applications from mining company OceanaGold to purchase land in Waihi for new tailings ponds associated with its gold mines have been approved. Minister of Finance Grant Robertson and Associate Minister of Finance David Parker considered the applications under the Overseas Investment Act. Earlier this year, applications from OceanaGold to ...
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    1 week ago
  • Tuia 250 Voyage flotilla launches with tribute to tangata whenua
    New Zealanders in Tūranganui-a-Kiwa / Poverty Bay will witness Māori, Pākehā and Pacific voyaging traditions come together today as the Tuia 250 Voyage flotilla assembles for the first time, Māori Crown Relations: Te Arawhiti Minister Kelvin Davis says. “Tuia 250 is a national commemoration and an opportunity for honest conversations ...
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    1 week ago
  • Visit to advance trade agenda with Europe and the Commonwealth
    Minister for Trade and Export Growth David Parker leaves tomorrow for Dubai, London and Berlin for a series of meetings to advance New Zealand’s trade interests.  In Dubai he will visit New Zealand’s Pavilion at Expo 2020 where construction is underway.  There he will meet Minister of State for International Cooperation, Her ...
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    1 week ago
  • More cancer drugs confirmed – even more on horizon
    Confirmation that PHARMAC will fund two new cancer drugs is further evidence of the good progress the Government is making to improve the treatment of New Zealand’s leading cause of death, Health Minister David Clark says. From 1 December PHARMAC will fund alectinib (Alecensa) for ALK positive advanced non-small cell ...
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    1 week ago
  • Boost for women in high performance sport
    An additional $2.7 million has been announced for the Government Strategy for Women and Girls in Sport and Active Recreation on the first anniversary of the strategy’s launch. Sport and Recreation Minister Grant Robertson gave the opening address to the first Sport NZ Women + Girls Summit in Wellington today, ...
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    1 week ago
  • Parent support to help retain skilled migrants
    As part of its work to ensure businesses can get the skilled workers they need, the Coalition Government is re-opening and re-setting the Parent Category visa programme, Immigration Minister Iain Lees-Galloway says. The move will: support skilled migrants who help fill New Zealand’s skills gaps by providing a pathway for ...
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    1 week ago
  • Senior NZDF Officer to lead Peacekeeping Mission in the Sinai Peninsula, Egypt
    Minister of Defence Ron Mark has today announced Major General Evan Williams of the New Zealand Defence Force has been selected as the commander of a significant, longstanding peacekeeping mission in the Middle East. In December, Major General Williams takes over as Force Commander for the Multinational Force and Observers ...
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    1 week ago
  • Nurses star as Govt rebuilds health workforces
    A record number of nurses are now working to deliver health services to New Zealanders as the Government’s increased funding and new initiatives rebuild key workforces start to show results, Health Minister Dr David Clark says. •    1458 more DHB nurses since the Government took office •    106 more midwives ...
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    1 week ago
  • New agricultural trade envoy appointed
    Farmer and former Nuffield scholar Mel Poulton has been appointed New Zealand’s Special Agricultural Trade Envoy, Minister for Trade and Export Growth, David Parker, and Minister of Agriculture, Damien O’Connor, announced today. The position supports key Government objectives, including raising the value of New Zealand agricultural goods and services. Mel is ...
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    1 week ago
  • Pacific and Māori voyaging heritage celebrated for Tuia 250
    New Zealand’s Pacific and Māori voyaging heritage is acknowledged and celebrated today as waka of the Tuia 250 voyage flotilla arrive in Tūranga / Gisborne. “Today we celebrate Tangata Whenua, the first people of Aotearoa, and the triumphs of the voyaging tradition that brought our ancestors here from Polynesia 1000 ...
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    2 weeks ago
  • Pacific languages are a root from which prosperity will grow
    “Fijian Language Week starts on Sunday and the theme reminds us how important it is that we each have something to anchor ourselves to, something that can help us pause and feel in control in a rapidly changing world,” says Minister for Pacific Peoples Aupito William Sio. “Family, culture, faith, ...
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    2 weeks ago
  • NZ Government establishes innovative, industry-focused Airspace Integration Trials Programme
    The Government is establishing an Airspace Integration Trials Programme to support the safe testing and development of advanced unmanned aircraft and accelerate their integration into the aviation system, Research, Science and Innovation Minister Megan Woods announced today. The Government will work with leading, innovative aviation industry partners to test and ...
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    2 weeks ago