Electricity regulator ‘taking closer look’ at price hikes
Tuesday, 28 April 2026
The Electricity Authority is questioning power companies about their latest price hikes, which come amid a sharp rise in the profits of the major generators.
The authority – the independent Crown regulator of the electricity market – said in a statement that households faced about an 8% price rise on average ahead of winter, with most of those increases having come into effect at the start of the month “on top of last year’s 8% increase”.
Stats NZ reported last week that electricity prices had risen 12.5% over the year to the first three months of the year.
Electricity Authority (EA) general manager Andrew Millar said it knew lines charges were increasing this year, but made clear that did not fully explain the price hikes.
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“That part of your power bill is regulated by the Commerce Commission, and accounts for around one-half to two-thirds of these increases.
“We want to know what else may be pushing prices up. This is why we’ve formally asked power companies with more than 1% market share for more information to explain what’s going on,” he said.
The information it had sought included price changes for different regions and types of customers, he said.
“We have also asked these retailers for a breakdown of the different components behind any changes to their pricing. This includes changes to lines charges, energy costs, retailing costs and margin, and how much each of these components is contributing to higher power prices.”
That could “inform our policy thinking on the best ways of putting downwards pressure on prices”, he said. “If the data shows anything unusual or outliers, we would engage with retailers to understand the situation in more detail.”
The major gentailers have been sharply increasing their prices despite strong hydro inflows that have meant they have been able to make extensive use of cheap hydro power.
In February, Meridian, Contact, Mercury and Genesis Energy reported a 42% increase in their combined operating profits for the six months to the end of December, which totalled $1.85 billion.
Their combined dividend payout to shareholders also rose, by 10% to $551 million, while the total sum they invested in so-called “growth capital expenditure” — new power plants, for example — was unchanged from the same period last year at $497m.
Broker Forsyth Barr earlier this month forecast that Meridian — the country’s largest generator — was on track to report an 89% increase in its net profit for the year to the end of June, predicting it would come in at $638m.
Meridian had a near-record performance in the March quarter, it said.
“Favourable hydrology and firmer wholesale electricity prices in March helped, but the main factor lifting [its] estimated energy margin was a high level of financial sales at a below average cost to supply,” it said.
Energy Minister Simeon Brown said the authority was doing its job by asking “the hard questions”.
“New Zealanders have seen their power prices increase significantly and those prices need to be justified.”
The EA was independent “but we have set our very clear expectations that affordability is a top priority for this Government when it comes to energy prices”, he said.
A spokesperson for the Electricity Retailers and Generators Association (Erganz), which represents the major power firms, said its members looked forward to engaging with the authority on its request.
“The authority acknowledges that lines charges increases account for around one-half to two-thirds of their estimated power increases. Electricity generator-retailers face the same pressures being felt throughout the economy, with inflation being a major contributor to power price increases over the last 10 years,” he said.
“Our members are investing billions of dollars into new generation projects to ensure a strong, secure supply of accessible electricity,” he added.