New Zealand First will be campaigning to split the big power gentailer companies up into separate generators and retailers.
NZ First leader Winston Peters made this announcement as part of his State of the Nation speech in Tauranga on Sunday, ahead of November's election.
“We will be breaking up the power companies so they can no longer control both the power and the price,” Peters said.
“For decades now, New Zealanders and New Zealand businesses have been getting a raw deal when it comes to electricity. You’ve been paying far too much for power.”
The big four power generator-retailers are Meridian Energy, Contact Energy, Genesis Energy, and Mercury Energy.
Currently, the Government owns a 51% stake in Meridian, Genesis and Mercury. Contact is one of the country's largest share market listed companies.
Peters said the current system was designed to make maximum profits for power companies, and everyday Kiwi families and businesses are the ones paying the price.
“Energy security is national security. It underpins everything - our households, our jobs, our industries, and our resilience as a nation.”
Peters said NZ First would deliver a National Energy Strategy.
“We’ll split the big power companies up into generators and retailers. The big four power companies control almost 90% of the electricity generation and then sell it back to themselves,” he said.
“That makes it very difficult for innovative and low-cost retailers to enter the market – which means prices stay high.
“Under the current system, the most expensive generator sets the price for all electricity - even electricity that costs peanuts to generate. It’s absurd.”
“We will replace the current system so that companies cannot hold back supply just to drive prices higher,” Peters said.
“We will guarantee long-term, fixed-price contracts for new-build generation projects, giving investors certainty. And we’ll guarantee their power will be first to be used.”
Peters said this would mean more power stations, more renewable energy, more competition and more resilience.
“And we’ll put power back into the hands of New Zealanders. If you generate power at home like solar, you should be able to sell it back to the grid at the same price you pay for it,” he said.
“It’s time to secure our electricity system for all New Zealanders.”
During his speech, Peters also talked about the economy, Fonterra, Air New Zealand, the Covid-19 inquiry, other political parties and the Indian Fair Trade Agreement.
At the event, it was also announced that former National minister Alfred Ngaro would be standing as a candidate for NZ First.
This energy policy announcement follows the party’s KiwiSaver proposal which would increase employee and employer contributions to 10% and make KiwiSaver compulsory. KiwiSavers and employers would receive tax cuts to cover the increases.
‘We will turn these current media polls into confetti’
The party has been performing strongly in polls - starting the year at 11.9% in the Taxpayers’ Union-Curia Poll and since then, sitting near 10% to 11%.
The latest March poll from Talbot Mills Research, prepared for corporate clients and obtained by Interest.co.nz, suggests support is sitting at 11% for NZ First.
On his party, Peters said: “Reflecting back, at this time before the last election, no one gave our party any chance of getting back to parliament.”
“Today we are here, and the question for the media is no longer - if we will get back, it’s ‘how many seats will we get?’.
“Well, we’ve got news for everyone, and this time it’s all good. We will turn these current media polls into confetti,” Peters said.
18 Comments
On this one I agree needs to be a break up
not sure the auction is right any more either
This has been the case in the UK for some time and perhaps in some other European countries. The UK had some problems with retailers going bust and owing the generators. They may have ironed this out by now.
Yes, I agree with what they are proposing for electricity generation/retailing reform.
And I would prefer that generation and the national grid become a single state owned agency. There will be detail to work through regarding privately developed geothermal, solar and wind generation being included in that agency.
There has been ethically, highly questionable behaviour by gentailers to manipulate generation to thier profit extraction advantage. That must me eliminated.
"There has been ethically, highly questionable behaviour by gentailers to manipulate generation to thier profit extraction advantage. That must me eliminated."
The 51% shareholder has the "power" to do that...oh, wait...
"If you generate power at home like solar, you should be able to sell it back to the grid at the same price you pay for it,” he said." This is highly questionable. I believe there should be some difference with sell back lower by some % than the paid rate charged. The contribution to the lines company for using their assets also needs evaluation and could be built in to the buy/sell differential %.
Finally. If he also announces breaking up the New World / Pak N Save combo he can have my vote.
We could have dearer power and food
We already have dear power and food. More competition please.
I’m not sure it always works out like that. Pak n save is already NZs cheapest supermarket by far, Woolworths aren’t bothering to compete on price, and New World probably wouldn’t either. What it may do however is reduce the scale and increase costs. For example according to the TV ads Pam’s is the biggest brand in the land. Will it be cheaper if they only sell half as much?
As for power, potentially breaking it up means two companies need to make a profit not one. And the retailer has to somehow price for dry years and expensive periods, that’s much easier if your the generator too.
Jimbo. Big supermarket chains are not efficient. They make money from their control.
Our crazy MMP electoral system gives us a dog whistling populist party like NZF.. No wonder this country can't do anything, can't make anything, is locked constitutionally to its colonial past, is unable to progress like other nations all the while forcing our best and brightest to leave.
NZFs position on not wanting any changes to the age pension is going to further hasten our slide into to bankrupt backwater. Their populist ignorant view, has NZ hamstrung, unable to change. It's like a drug addict, who knows they can't afford it, realise its harming them and want to stop, but are not strong enough or have the willpower. That's what MMP has done to NZ by empowering parties like NZF.
MMP succeeded because the electorate was tired of the shenanigans firstly of the Muldoon government and secondly that of Lange & Co. Unfortunately, and it is hard to disagree with you, MMP has failed to be the saviour the electorate expected. The immediate swelling in numbers has seen MPs enter parliament who are little better than riff raff. It has ushered in the career politician, not long out of school and happy to evidence it. The average calibre and conduct of parliament itself, has undeniably deteriorated. But the old problem though, still remains. Neither of the major parties inspire confidence in either leadership or direction. A stark reminder of that unwelcome potential was well demonstrated when the sixth Labour government was returned in 2020 as a government in FPP form and immediately commenced introducing policy, think three waters, that had not been mentioned in their manifesto.
I prefer MMP. In the old days we elected a 3 year dictatorship. With associated madness.
True, but Winston knows he only needs 5% to hold sufficient power, and he'll appeal to the boomers until there's not enough left to give him said power.
We blame the pollies but we the voters enable this - on all sides. Who is the problem?
Where's the same intention re the supermarket industry? Consumers would probably prefer a break up in that sector given they spend twice as much on food than power.
“We will guarantee long-term, fixed-price contracts for new-build generation projects, giving investors certainty. And we’ll guarantee their power will be first to be used.”
How do you do this? Especially when you will need multiple sources to guarrantee continuous supply?
The cost of maintenance, machinery, labour for new and existing generators systems isn't going down - China has just removed the subsidies on Solar panels so they will increase as well.
In the current situation the price of electricity looks very very cheap in the system we have now.
IMO either NZF is '...ing into the wind' on this one to gain votes or they mean it and will join with Labour to form the next govt. because NACT are BAU and won't change electricity generation, distribution and retailing. Perhaps Winston in his final political years will do something that he can be proud of and the general public will appreciate for decades.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.