Meridian, see me in my office – Peters

The Meridian Energy board chair and chief executive have been asked to “front up” in state-owned enterprises minister Winston Peters’ office before August 6 and explain why the company was found by the Electricity Authority to be involved in an “undesirable trading situation” during December 2019.

Between December 3 and 18 last year, Meridian spilled water from its hydro generation stations while simultaneously offering this generation into the spot market at prices above its short-run marginal cost, it is alleged.

Peters says that’s “utterly unacceptable”.

“The Meridian board chair and chief executive have been told to front up to my office and explain themselves before the House rises on August 6,” Peters says.

“It is a damning preliminary finding by the Electricity Authority and there is something very wrong with the regulation of the energy market when it takes a complaint for market manipulations to be investigated and acted upon.”

“Spilling water while generating below capacity resulted in higher wholesale prices as well as relying on more costly coal-fired generation out of Huntly power station,” Peters alleges.

“As one complainant put it, the result of Meridian’s action was about 6000 tonnes of additional carbon emissions, the equivalent of about 50,000 Toyota Corollas chugging around our roads during that December period.”

Meridian Energy pushed up power prices in December by unnecessarily spilling water from its South Island dams that could have been used for generation, the Electricity Authority says in a preliminary ruling.

It says the “undesirable trading situation” could have resulted in other electricity retailers having to pay an extra $80 million for power on the wholesale market, though the final cost could not yet be determined.

“Meridian’s activities led to more expensive generation running in the North Island at a time when there was excess fuel in the south,” Electricity Authority chief executive James Stevenson-Wallace is reported as saying.

“By our calculation a total of about 41 gigawatts-hours of additional energy could have produced during December,” Stuff reports.

Meridian’s acting chief executive Guy Waipara says in the Stuff

report it will review the authority’s preliminary decision and make a submission as part of its consultation process.