Winston Peters to Meridian: Please explain

Friday, 17 July 2020

There are lots of components in a typical power bill.

Minister for State-Owned Enterprises Winston Peters said he was “shocked and concerned” at the Electricity Authority’s preliminary finding that Meridian Energy pushed up power prices in December by unnecessarily spilling water from its South Island dams that could have been used for electricity generation.

The authority said the “undesirable trading situation” (UTS) could have resulted in other electricity retailers having to pay an extra $80 million for power on the wholesale market, though the final cost could not yet be determined.

“It is utterly unacceptable that Meridian Energy have been found by the Electricity Authority to have, essentially, gerrymandered the market for profit,” Peters said.

“The Meridian board chair and chief executive have been told to front up to my office and explain themselves before the House rises on August 6.

* Meridian involved in 'undesirable trading situation' says Electricity Authority in preliminary decision

Winston Peters said he had asked Meridian’s board chair and chief executive to front up.

* Electricity Authority accused of dragging its feet on pricing reforms

“It is a damning preliminary finding by the Electricity Authority and there is something very wrong with the regulation of the energy market when it takes a complaint for market manipulations to be investigated and acted upon.”

He said the mixed-ownership model in the energy sector was “always a recipe for disaster for consumers”.

“Spilling water while generating below capacity resulted in higher wholesale prices as well as relying on more costly coal-fired generation out of Huntly power station.

“As one complainant put it, the result of Meridian’s action was about 6000 tonnes of additional carbon emissions, the equivalent of about 50,000 Toyota Corollas chugging around our roads during that December period.

“It is unsatisfactory, and long-suffering energy consumers deserve better,” Peters said.

Meridian acting chief executive Guy Waipara said would review the authority's preliminary decision and make a submission as part of its consultation process.