Energy Minister Simon Watts welcomes the new rule agreed to by the Electricity Authority will level the playing field for smaller power companies, boosting retail competition to put downward pressure on power prices.
“We know many Kiwis are struggling with the cost of living, with rising energy prices putting more pressure on their budgets. That’s why this Government is taking competition in the electricity market seriously because more competition means Kiwis can have access to more affordable electricity,” Mr Watts says.
“Currently the large power companies can cross subsidise themselves because they both produce energy and sell it. The new rule will mean they have to offer their generation at the same rate to everyone and can’t offer themselves discounts. This will level the playing field by giving smaller companies a better chance to compete and will mean Kiwi consumers have more choices.
“Healthy competition is essential to give us the reliable and affordable electricity we need to power our homes and businesses. The changes announced today will encourage investment in new generation and allow all players to compete on a level playing field. This will lead to better economic outcomes, including for our large-scale industries.”
These changes were developed under the Energy Competition Task Force, established in August last year in response to the winter power crisis. The new non-discrimination rule will be consulted on later this year.
“While today’s announcement is a positive step, we remain deeply concerned about the lack of affordability and competitiveness in the electricity market. I expect the Authority to deliver more efficient, competitive, and reliable electricity market,” Mr Watts says.
“Looking ahead, I have also received the final report of the electricity markets performance review, which looked at how we can improve the market to support economic growth and ensure access to reliable and affordable electricity for consumers. I will have more to say on the review’s outcomes in due course, once Cabinet has given careful consideration to its findings and recommendations.”