ACT welcomes sensible levelling of electricity playing field

“The Electricity Authority has done the right thing for households with a smart change targeting power bill pain. Amending the Electricity Participation code to ensure Gentailers treat any retailer the same as their own is exactly the kind of change households need,” says ACT Leader David Seymour.

"The generators sell into the wholesale market but also buy it back as retailers in their own right. Having one company on both sides of a transaction is an obvious weak spot for a competitive market. From July 1 they’ll be on notice, with regular reporting on how they treat retailers they don’t own compared with the retail arms of their own firms.

“Some people say the choice is do nothing, pay through the nose, or blow up the whole industry. That is a false choice, it is possible to support investment while continuing to improve the market. Today’s announcement is a good example of that.

“There is currently more generation under construction than at any time since the Think Big initiatives of the 1970s, and forward prices for New Zealand electricity on the ASX are dropping every year forecast, through to 2029. That is the dividend of stability since Rio Tinto signalled it would stay and the government stopped threatening to spend $15 billion on Lake Onslow.

“The pain of the power bill is real, but not every suggestion I’ve heard lately will help. We all want abundant, cheap electricity, but you don’t get it from dramatic moves that scare away the very investment customers need for cheap, abundant energy.

“We hear endless ham-fisted ideas from headline hunters that would do more harm than good. We’re promised that we’ll somehow get cheaper power by attacking the very industry that we need to invest in itself and grow.

“Breaking up retailers, for example, would not lead to one more kilowatt hour of energy in the system. It would send a message to investors though: ‘this is a risky market to invest where the rules can easily change while you’re still paying back debt on that new generator you built.’ We’ve seen that movie before with oil and gas, and the ending hasn’t been great.

“Instead, the Electricity Authority is doing its job in a common-sense way. Today’s changes make the rules clear, competition a non-negotiable, and investment viable. That is the kind of practical, problem solving approach that will ease power bill pain.”