How will we end the power price pinch? On this issue, Simon Bridges and the Greens agree

Thursday, 2 October 2025

Persistence in high power prices can in part be attributed to reluctance of major electricity generators to invest in new infrastructure.

The cost of power is costing livelihoods. Mills and factories are closing across the country, tearing the lifeblood out of heartland New Zealand. Rising energy costs are driving up the cost of living, hitting households.

All the while, power companies are making record profits last year - but with the network unable to maintain supply during the following “dry year”, profits took a hit even as consumers paid more.

On Wednesday, the Government confirmed its plan. It would look to invest in a liquid natural gas import facility, and clarified that it was willing to invest in profitable generation projects via its portfolio of power companies.

A central North Island community is devastated by the closure of Winstone Pulp and Timber Mills due to rising power costs, threatening over 200 jobs. Despite a $429 million profit from Meridian, the government has yet to commit to immediate help.

But the Government’s political opponents - and even former National Party energy minister Simon Bridges - have come together to say that plan doesn’t go far enough.

Energy Minister Simon Watts released his plan after commissioning a review into the electricity sector.

However, the review called for something entirely different. It said the Government should sell its shares in the current electricity companies, to start a new firm focused on building generation capacity for “dry years”.

So, how do we bring down the price of power?

Here are the ideas from the Government, the economists it hired, Simon Bridges, the Green Party and the trade unions.

The Government’s plan: Gas imports, new investment

The Government says it wants to see a liquefied natural gas facility built in New Zealand.

Watts announced the start of a procurement process for a liquefied natural gas (LNG) import facility. The Government, its power companies and Port Taranaki have been looking into this for years.

By importing LNG, power companies could use it when there isn’t enough wind and water to keep up with power demands. Typically, those companies have used gas and coal to supplement the ongoing supply of geothermal energy - but gas reserves are running out.

As The Post reported, various estimates have put the cost to set up an LNG facility at anywhere between $140 million to $600m.

Finance Minister Nicola Willis also said she had met with the chairs of Genesis, Mercury and Meridian - three companies the Government holds a 51% stake in - to clear up that the Government was willing to invest in new generation.

“We expect these companies, in which we are the major shareholder, to seek out and bring forward commercially sound opportunities for new generation,” she said.

Former National Party leader Simon Bridges served as minister of energy and resources between 2013 and 2016.

Simon Bridges: Government should underwrite back-up energy supply

Auckland Chamber of Commerce boss Simon Bridges, who served as the minister of energy and resources during the former National government, said the Government’s plan didn’t do enough.

“The problem is not what is included in the announcement, it’s what’s been left out. On their own, these measures aren’t enough to address the root causes of unaffordable energy prices and tenuous supply, and any benefits they deliver to energy users will be a long way off.

“Kiwi businesses and households have been crying out for bold action – today, they didn’t get it,” he said.

Bridges said the Government should consider underwriting back-up energy supply, or separating the generation and retail functions of the electricity companies.

New Zealand’s power generators struggle to maintain supply during “dry years”, given reliance on dams.

“Without these sorts of measures, energy is going to continue being a handbrake on New Zealand’s economic prospects into the future,” he said.

Economists: Sell power shares to invest in geothermal

The Government commissioned British consultancy firm Frontier Economics to find solutions to bring down the price of power.

Its report, released on Wednesday, made many recommendations. Some of its key suggestions were:

The Government divest its 51% shareholdings in those three power companies, and use that money to invest in a reliable back-up power source for when there isn’t enough generation capacity.

Council of Trade Unions economist Craig Renney released his proposal to cut the cost of electricity.

Remove electricity from the Emissions Trading Scheme.
Merge the country’s 29 lines companies into just five distributors.
The Government create a new Crown entity to focus on securing geothermal energy.
The Electricity Authority and Gas Industry Company should merge, with the authority focusing urgently on standardising billing from power companies “so that customers are better able to compare retail offers”.

The report said relying on LNG would be costly.

“It would make no economic sense to develop an LNG import terminal to meet just dry year risk as the large fixed costs would be spread over a relatively small amount of output,” it concluded.

Unions: Buy all the power companies

The Council of Trade Unions (CTU) released its own proposal on Tuesday for how to bring down the price of power.

CTU economist Craig Renney said the Government should start buying back full ownership in Genesis, Mercury and Meridian, by using dividends paid from the companies to buy more shares.

Under the last National government, 49% of each of those companies were listed for sale on the NZX.

Renney said that had led to under-investment in power generation, as the companies looked to maximise profit.

“We spent a decade or more under-investing in electricity generation, and clean, renewable energy generation in New Zealand. The problems we face are consequences of those under investments.

“The current market, which is largely private-led, is delivering the poor outcomes that we have right now. It's not getting better. In fact, it's getting worse. Electricity prices are up 11% this year for households,” he said.

Green Party: Split the power companies, reinvest profits

Green co-leader Marama Davidson said she would be splitting the generation and retail arms of the power companies.

The Green Party also wanted to give tax breaks and “Clean Power Grants” to people installing their own solar, wind or hydro generators.

She said the profits the Government made from its stake in those three power companies should be reinvested into renewable electricity generation.

“We can build a more sustainable and affordable electricity network that puts people and planet before the profits of our gentailers. But what’s required is significant structural reform and government-led intervention, not more market-led solutions,” she said.