Electricity Authority killing off promised ‘level playing field’, say power retailers
Monday, 8 December 2025
Independent electricity retailers and generators say the Electricity Authority is proposing to cripple a reform that had been touted as likely to create a level playing field between their own businesses and the major gentailers in the retail sector of the power market.
In February, the Electricity Competition Task Force — run jointly by the Commerce Commission and the Electricity Authority (EA) — proposed the major gentailers would need to abide by new “anti-discrimination” rules to ensure they did not advantage their own retail arms when selling power they generated.
Energy Minister Simon Watts said at the time the proposed measures sent “a strong signal that gentailers creating an advantage for their own retailers at the expense of the affordability and security of New Zealand’s energy supply will no longer be tolerated”.
However, independent retailers say the EA has proposed the non-discrimination rule would apply only to the small amount of power Meridian, Contact, Mercury and Genesis had for sale that they did not expect to use to serve their own customer bases.
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Octopus, 2degrees, Electric Kiwi and Pulse Energy have written to the EA voicing what they described as fundamental concerns over “critical flaws” in the EA’s proposal, which they said would not deliver a genuinely competitive or level playing field.
The letter was countersigned by the Independent Electricity Generators Association which represents smaller solar and wind power generators.
Independent retailers have in the past accused the EA of being subject to regulatory capture by the major generators.
Octopus chief operating officer Margaret Cooney said the EA’s proposal came as a big surprise when it was first suggested two months ago.
“I couldn't say whether they've been captured or not, but this doesn't deliver on their stated intentions.”
The EA’s general manager of wholesale and supply, Hayden Glass, said its main objective was to “promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers”.
The authority had received a range of views on the draft code changes it released for consultation in October and “it’s not our practice to comment on particular submissions”, he said.
Ministers were being informed of its proposals and decisions along the way, he said.
The retailers said in their letter that the four large gentailers would be able to classify the vast majority of their power generation as “committed”, effectively circumventing the non-discrimination requirements and rendering the reform ineffective.
“The rules would apply to only a tiny and likely insignificant proportion of capacity.
“It would create a loophole that enables refusal to supply, making enforcement extremely difficult and stifling competition and investment by independent generators and retailers.”
Cooney said the definition of uncommitted capacity excluded the major generators’ “own retail volume, organic growth for that retail business, and the ‘market-making’ obligations that they have and any other commercial commitments”.
Although the retail reforms would only have ensured a level playing between retailers — rather than necessarily addressing any issue of excess profits in the generation arms of the four major gentailers — the Government had billed them in February as the biggest rule change for the sector since the Bradford reforms of the electricity industry in the late 1990s.
Commerce Commission chairperson John Small had said they would also have the effect of encouraging investment from independent generators, by making it easier for them to sell power from the likes of solar farms and wind farms.