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Independent retailers call for sanctions on generators

Press Release – Joint Media Statement

Independent electricity retailers call for immediate sanctions on generators to protect consumers from pumped up pricesIndependent electricity retailers call for immediate sanctions on generators to protect consumers from pumped up prices

The country’s independent power retailers say generators are controlling hydro storage in a way that results in wasted water, higher electricity prices and an unnecessary increase in carbon emissions.

Ecotricity, Electric Kiwi, Flick Electric, Pulse Energy and Vocus Group, are calling on the Electricity Authority (EA) to immediately intervene and regulate the bidding behavior of big generators.

The independent retailers, who have around 178,000 customers between them, are supporting a complaint to the EA calling for wholesale prices to be reset to reflect the fair use of water and reduced use of fossil fuels.

The complaint alleges Meridian and Contact have been spilling more water from their dams than they need to, which in turn inflates prices for Kiwi families, businesses and industry.

“Contact and Meridian have been pricing their hydro offers at high prices, resulting in North Island thermal being dispatched instead. We calculate that these actions have resulted in more than 6,000 tonnes of avoidable CO 2 emissions,” Group Spokesperson and Electric Kiwi CEO, Luke Blincoe says.

“This is particularly hypocritical given Meridian likes to virtue signal about being 100 percent renewable. Some spill is inevitable due to the heavy rainfall in the South Island, but the extent of spill is unnecessary since Contact and Meridian aren’t running their hydro at maximum capacity.” “After the Electricity Price Review, the Energy Minister asked for affordable wholesale prices and anticipated we’d see falling retail prices. But the opposite is occurring as the EA has not yet sufficiently regulated the inherent market power of the Gentailers. The Minister’s directive is clear and right,” Blincoe says.

The Undesirable Trading Situation (UTS) Claim by Haast Energy Trading estimates that Contact and Meridian have earned excess revenue of at least $23 million and $38 million respectively in the month since 10 November 2019 – and this is ongoing.

The claim calls for a sanction that not only requires Contact and Meridian to pay back the excess spot prices, but also a penalty to send a strong message to generators that they should not use market power or engage in this type of conduct.

View the claim here:

www.ea.govt.nz/code-and-compliance/uts/undesirable-trading-situations-decisions/10-november-2019/

ENDS

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