Independent retailers Ecotricity, energyclubnz, Flick Electric Co., Pulse Energy, Vocus (who also retail power through Slingshot and Orcon), and Electric Kiwi cautiously welcome the Government’s decisions for boosting competition in the electricity sector.
These independent electricity retailers have taken the call to collaborate and have already met to discuss how to assist the Electricity Authority (EA) as they are tasked with implementing the Government’s reform decisions with urgency. The independent retailers support the Government reforms and are calling for swift and decisive action from the EA to ensure a level playing field.
Mark Yates, Director of Ecotricity says “We welcome these changes the Government is recommending. The key is ensuring these are implemented in short time frames, ideally this side of Christmas. Swift action will help deliver the Governments desire of a “consumer-focused market, fairer and more affordable prices”
Flick Electric Co. CEO, Steve O’Connor says, “The Government’s decisions finally put the customer back at the centre of the electricity industry. I applaud the government for recognising that the market is far from where it needs to be and calling for fundamental change.”
Gary Holden, CE of Pulse Energy says, “Banning the inappropriate practice of prompt payment discounts can’t happen fast enough. These inflated penalties hurt Aotearoa’s most vulnerable families and provide no benefit to our industry whatsoever. This work can happen by year end.”
Johnathan Eele from Vocus said, “Getting rid of a two-tier energy market that unfairly favours those that decide to switch is key to creating the competition so severely hampered in our industry. Which is why, ending the inappropriate practice of win-backs must happen with urgency.”
Luke Blincoe, CE of Electric Kiwi said, “The EPR panel concluded, ‘The current wholesale contract market is not working effectively’. The time for action from the EA is now. Mandatory market-making must be implemented ahead of any further work on the current work plan, including the TPM which is simply wealth reallocation from consumers to generators. The EA’s current work plan needs to be scrapped immediately and these recommendations prioritised today.”
As a group, the independent retailers welcome the opportunity to work with the Government and the Electricity Authority to ensure no time is wasted in fixing an inadequate system. It’s great to see the Electricity Authority acknowledging that they “can do better” and “need to act with pace”. We look forward to the EA resetting its work programme and giving the highest priority to implementing the Government’s recommendations.
What to expect from the changes in the electricity market? Here’s a brief on the major changes.
- Substantial increase in liquidity and products in the wholesale market which will bring wholesale electricity costs down and allow for cheaper renewable generation for New Zealanders to enter the market.
- A ban on Save and Wins backs. Large Gentailers have been targeting departing customers by offering them substantially better prices compared to non switching and loyal customers.
- Gentailer retail transparency. This requires the retail operations of Gentailers to show all their costs of operation separate to their generation assets. This will make it difficult for Gentailers to un dercut the market with transfer prices.
All of the above measures, and more, will increase competition in the wholesale and retail section of the market, ultimately dropping the costs to the consumer. Similar types of measures were successful in the telco sector which resulted in New Zealand now being one of the most competitive telco markets in the world!