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Independent Power Retailers Lay Joint Complaint to EA

Press Release – Joint Press Release

NZs Largest Independent Power Retailers Lay Joint Complaint to Electricity Authority, Calling for Urgent ActionNZ’s Largest Independent Power Retailers Lay Joint Complaint to Electricity Authority, Calling for Urgent Action

Market power of ‘gentailers’ is jeopardising competition, leading to higher prices for Kiwis Independent retailers Pulse Energy, Electric Kiwi, Vocus Communications and Flick Electric today laid a joint complaint with the market regulator the Electricity Authority (EA) about wholesale electricity market conditions.

The retailers, who have over 148,000 customers combined, argue that the current high spot prices set by the generator/retailers (‘gentailers’) are not transparent nor justified, have collapsed liquidity in the hedge market and threatened the very existence of independent competition.

Electric Kiwi CEO, Luke Blincoe says the EA should step up. “By allowing current conditions to go unchecked, the EA is failing to regulate this sector with the independence and vigour necessary to fulfil its responsibility for promoting competition and the interests of consumers. This inaction undermines confidence in the market, and ultimately demonstrates market failure.”

Pulse Energy CEO, Gary Holden agrees. “To this point, the EA has measured the degree of competition based upon the simple metric of the number of retailers in operation. It is now time to take a serious look at the market deficiencies that are impeding these retailers from delivering better prices to consumers. A few simple steps, based on sound market principles, could provide a more level playing field for innovative retailers, create a more sustainable business environment and long term consumer benefit”, he says.

Flick Electric CEO, Steve O’Connor says the the prices show the market’s design is flawed. “This situation is not about ‘business as usual’, it is about opportunism driven by a lack of well-supported competition – opportunism that has already seen three independent retailers exit the market. We are elevating this issue on behalf of our customers and all Kiwis, who deserve a properly functioning market that enables product innovation and consumer choice”.

“Essentially the big gentailers have been ripping off Kiwi families for decades and will continue to unless they are made to change their practices. We and other smaller players have worked hard to drive competition in the market, while the gentailers continue to make massive profits thanks to questionable spot market pricing”, says Vocus Head of Regulatory and Commercial, Johnathan Eele.

The four companies are lodging an Undesirable Trading Situation (UTS) Claim for urgent consideration by the EA. The market’s regulator is obliged to consider the claim and make a decision as to whether this constitutes an “extraordinary event” which threatens confidence in the wholesale market as per the Electricity Industry Participation Code.

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