Electric Kiwi chief executive Luke Blincoe said the big four gentailers have been using their power to squeeze out retail competition while driving prices up. Photo: 123rf
Power retailer Electric Kiwi has made a formal complaint to the Commerce Commission alleging abuse of market dominance by the biggest four power companies.
Electric Kiwi argued electricity gentailers Meridian, Mercury, Genesis, and Contact - which both generate and sell power - control around 85 percent of electricity generation and had been using their power to squeeze out retail competition while driving prices up.
"We have been saying for a long time now that the gentailers are misusing their power in wholesale markets by refusing to supply shaped hedge products to non-vertically integrated retailers, including Electric Kiwi," chief executive Luke Blincoe said.
"In the past five years we have seen more than 20 retailers leave."
Mercury chief financial officer William Meek rejected the claim of market abuse , and said the company supplied shaped hedge products to a range of retailers, including Electric Kiwi.
"The market is highly competitive, which is a good thing as consumers have a range of options," he said in a statement.
"New Zealand's electricity market has enabled massive investment of capital in renewable generation while keeping the lights on for Kiwi and residential electricity price increases lower than inflation."
Mercury had completed construction of New Zealand's largest wind farm at Turitea near Palmerston North and begun commissioning the Kaiwera Downs windfarm near Gore, with a combined worth of more than $500 million. It was expecting to commit up to $1 billion over the next financial year in new renewable generation.
Blincoe said the complaint had been made to the commission because the Electricity Authority had failed to take action.
The authority is calling for feedback on whether retail customer care measures should be mandatory, as opposed to voluntary.
The guidelines were introduced in 2021, and covered consumer care, provided guidance on customer sign-up processes, what power companies should do when consumers were struggling to pay their bills, how power companies ensured medically dependent customers were protected, among other matters.
A recent Consumer NZ survey indicated 19 percent of households had trouble paying their monthly power bill in the past 12 months, while 12 percent of households reported being cold because they had to cut back on heating due to its cost.
Meridian, Contact, Genesis and Mercury made a collective $2.7 billion in operating profits in the just ended financial year.
Contact Energy, the only privately-owned company of the four, made $573 million before tax - a 5 percent increase from 2022.
Chief executive Mike Fuge told Morning Report the company recognised ordinary Kiwis were "doing it hard at the moment" but the profits were in line with the "incredible amount of investment that's going in to the industry at the moment to decarbonise".
