Changes to electricity market could aid EV charging

Consumers will benefit from changes to the electricity market that will see a level playing field for smaller independent retailers, greater transparency over the big power companies, increased competition in the market and more support for consumers to shop around for better deals.

So says energy minister Megan Woods, explaining the changes include requiring big power companies to sell electricity at affordable rates into the wholesale market to level the playing field for smaller and independent retailers, also expected to help lower costs for some EV charging.

It’s part of the Government’s response to the Electricity Price Review which will see 20 of the review’s recommendations progressed immediately.

“Helping Kiwi families meet the cost of living is a long-term challenge for New Zealand. We can’t fix it overnight or in one fell swoop, but there are a range of practical things we can do to tilt the balance in favour of consumers while adding more competition to the marketplace to take pressure of the monthly power bill,” Woods says.

“Right now, our electricity system is dominated by a small number of big ‘gentailers’ -companies that generate and sell electricity. It can be too hard for small and independent retailers to compete and survive, meaning fewer choices for consumers and less innovation in the market. We are changing the market to level the playing field and boost competition.”

The changes include extending discount rates to all customers, a pilot scheme to help customers who have not switched power providers before to shop around for better deals and requiring power companies to put information about how to switch on the communications they send consumers, putting a moratorium on “win-backs” that companies use to stop customers switching between providers, and requiring greater transparency on the profits of the big gentailers.

“The EPR found that while overall the market is working well, it is not delivering for everyone,” Woods says.

“Too many people are paying higher bills than they need to and many people struggle with the cost of power.

“Our programme will also reform the electricity sector to make it fit for the future – giving consumers better access to emerging technology and increasing New Zealand’s investment in renewable energy.”

Woods says the industry is on notice.

“We intend to review these changes in our second term to ensure savings are passed on to consumers. We will be passing backstop legislation shortly to allow the Government to introduce regulations directly when required.

“We will also be requiring retailers to follow Meridian’s lead and change pricing structures to pass discount rates onto all customers instead of relying on hidden late payment penalties. When Meridian did this, it put $5 million back into the pockets of consumers, and the EPR estimates that $45 million would come off power bills when other companies follow suit.”