The group representing power companies says network costs and tight wholesale supply are among the drivers pushing up power prices. The Electricity Authority says most households have seen an average increase of about 8% to their power bills this winter, on top of last year’s 8%. Network charges have accounted for between 40 to 45% of that increase. New Zealand’s four major gentailers – Meridian, Mercury, Contact, and Genesis – declined a request to come on Morning Report. Electricity Retailers’ and Generators’ Association chief executive
Bridget Abernethy told Morning Report a lot of money was going into new generation, which should flatten prices long term. “What we’ve seen is a decline in gas and tight hydro conditions which push the prices up,” she said. “What’s happening now is that those profits fund new generation, so that’s critical to flatter prices in the future.” A preview by investment firm Forsyth Barr suggested Contact, Genesis, Meridian and Mercury would make combined operating earnings, before hedging and one-off costs, of $1.86 billion for
the six months ended December. That compares with a combined $1.28b in the same period in 2024 when the sector was struck by dry hydro conditions, a lack of gas and the need to rely on coal, sending wholesale prices surging. Abernethy said profits moved with market conditions. “I think there are a lot of factors that are making up price increases at the moment, it’s not one single factor,” she said. Network costs and tight wholesale supply were among the drivers, Abernethy said. She
said profits were going back into more generation, which would bring prices down. “I think what matters to consumers is that they know that there’s focus now on more generation and bringing prices down overtime,” Abernethy said. “The other issue is that, while affordability is top-of-mind for consumers and particularly in winter, consumers also care about things like reliability and resilience, they want to know that the energy infrastructure is going to be there when we have the next Cyclone Gabrielle.” Abernethy said there were
trade-offs that they had to grapple with at the moment. The priority for gentailers was helping customers get through winter, she said. “The cost pressures are very real for households and business, and it is a really difficult time,” she said. “Energy costs in the home have gone up and that’s really tricky.”
power prices, electricity bills, network charges, wholesale supply, Electricity Authority, gas decline, tight hydro, Bridget Abernethy, Contact, Genesis, Meridian, Mercury, Forsyth Barr, Cyclone Gabrielle