Gloves off and finger-pointing within power industry

Power companies are divided on how to ease the burden of price on low
income families and bring greater competition into the sector.

The differing approaches to solving some of the key issues facing the
sector have emerged in company submissions to the Electricity Price
Review, which is looking into why prices have been rising faster than
inflation and whether changes are needed to ensure fair pricing for

The first report of the Review found that consumers were paying 79
percent more for power than in 1990, but cleared the power companies
from making excessive profits.

Meridian Energy has called for the rest of the industry to follow its
example and end late payment fees, which it estimates could save
customers $40 million a year.

But the chief executive of Genesis Energy, Marc England, said scrapping
the prompt payment discounts will not help vulnerable households because
it did not address the root cause of hardship.

"You've got to be very careful in these situations, what sounds like a
good headline is not always the best solution," Mr England said.

He suggested introducing a means-tested electricity customer assistance trust to give government grants to the most vulnerable.

Mr England said it was wrong to think companies that generated and sold
electricity, the 'gentailers' - Genesis, Meridian, Mercury, Trustpower
and Contact Energy - were not transparent.

He also pointed to the different pricing policies and structures of the 29 lines companies as a key factor in retail prices.

However, small retailers Electric Kiwi and Flick Electric want generation and retail businesses to be separated.

Electric Kiwi wanted another state-owned enterprise formed, to hold a stake in all generation assets.

Flick said such companies had not done enough to explain plant outages
and a lack of storage in recent weeks, which had driven prices to recent

Flick's chief executive Steve O'Connor​ said prices charged by gentailers were unprecedented.

"Those prices bear no resemblance with the actual market conditions, nor
the cost of delivering energy, nor indeed any security of supply
issues," Mr O'Connor said.

He said the industry regulator, the Electricity Authority, was failing
to do its job and was not asking big players enough tough questions in
the pricing review.

Mr England said the review had "absolutely" reflected Genesis' thoughts.

"I think the review so far has been incredibly thorough."

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