Electricity Authority’s plan to fix market is too little too late

Announced this week, the plan aims to create an even playing field between the four big companies that generate electricity – Genesis, Contact, Meridian and Mercury – and independent power retailers.

Under the plan, the four gentailers will need to offer their electricity to independent retailers on the electricity wholesale market in a fairer way.

The idea is to stop the gentailers from using their market power to advantage themselves over smaller competitors. The planned changes are due to take full effect by mid-2026.

Paul Fuge is the manager of Powerswitch, a comparison website run by Consumer NZ. Paul says the “tweaks” should give consumers more choice and better deals in the long term. But they fall short of the major reform we believe is needed.

“The current electricity market is simply not delivering for consumers, and we have been advocating for reform for many years,” Paul says. “Unfortunately, it feels too little too late. Action only came after a crisis, but this horse has bolted, and several small retailers have already exited.”

Both companies we gave our 2025 People’s Choice power company award to closed recently. Flick Electric was sold to Meridian, and Frank Energy has been absorbed by its parent company Genesis.

“Years of inaction have cost households through soaring power bills, stalled competition and lost opportunities for fairer deals. Last year, 400,000 households struggled to pay their power bills – even as big energy companies posted eye-watering profits,” Paul says.

“While these are good tweaks, they are not the bold reform needed to fix a broken system. These changes to level the playing field may help soften the margins, but they won’t fix a broken system. The regulator must put consumers first; households can’t afford to wait any longer.”

Electricity Authority chair Anna Kominik says, “We know from the conversations we’re having that some feel regulatory change is not happening fast or hard enough. The proposals being announced today target measures that can be rolled out in months, not years, driving timely progress while ensuring all parties can participate in and contribute to the process.”

What we think should happen

Paul says there needs to be more separation between generation and retail to encourage competition.

“After 25 years, vertical integration has failed to deliver genuine choice or fair prices. Changes are also needed to help consumers engage through billing and pricing standardisation and better data access so households can easily compare options and understand costs. A market that people can’t read or navigate is one they can’t truly participate in.”

But Paul says the thing that would make the biggest difference to consumers is to increase power supply.

“Current market rules reward scarcity, pushing New Zealand from one energy crisis to the next. The rules must change to incentivise new generation investment.”