- Hon Simon Watts
- Hon Shane Jones
A proposal by the Electricity Authority for mandatory non-discrimination obligations for electricity gentailers sends a strong signal that any advantage being provided to their own retailers will not be tolerated, Energy Minister Simon Watts and Associate Energy Minister Shane Jones say.
"This recommendation from the Energy Competition Task Force has been accepted by the Electricity Authority (EA) which launched consultation today on the measures to create a more level playing field for the energy sector," Mr Watts says.
The EA is proposing a progressive approach to non-discrimination obligations supported by increased monitoring of gentailers' responses and consumer outcomes. If the first step proves insufficient, the EA could escalate to more prescriptive ways of levelling the playing field to ensure all New Zealanders can benefit from critical flexible generation.
The proposed steps are:
- Step 1: Principles-based non-discrimination requirements.
- Step 2: Non-discrimination requirements set out in detail.
- Step 3: All gentailer-supplied hedge contracts must be traded through a regulated market, on equal terms for all buyers.
"The proposed measures send a strong signal that gentailers creating an advantage for their own retailers at the expense of the affordability and security of New Zealand's energy supply will no longer be tolerated," Mr Watts says.
"A reliable and secure energy supply goes hand in hand with more affordable prices for Kiwis, and that is a key priority for the Coalition Government. This work could help promote much-needed investment in new generation and retail competition, flowing through to more choices and more affordable electricity for consumers."
"If these proposals go ahead, we will see much-needed rules put in place for how gentailers engage with independent and smaller players in the market, and what kind of terms they have to offer them," Mr Jones says.
"This means gentailers would be required to treat independent retailers and generators the same as they do to their own retail arms, shifting the dial on market competition by ensuring smaller and independent players in the market are on a level playing field with the big four gentailers."
The task force was established by the Electricity Authority and Commerce Commission, with MBIE as an observer in August last year in response to the power crisis in winter.
The task force is focused on enabling new generators and independent retailers to enter, and fairly compete, in the market as well as providing more options for users.
Mr Watts met the gentailers two weeks ago and warned them the Government would not accept a repeat of last winter.
"All gentailers have a critical role in keeping the lights on at affordable prices and it's important they keep taking action. This consultation will give a better picture of what else is needed to shore up reliable electricity supply, including in response to the current independent review of our electricity markets," Mr Watts says.
