New Zealand’s electricity gentailers have announced half year profits totalling over half a billion dollars. At the same time, many consumers are being told their bills will be going up. Is it fair?
How big are the gentailer profits?
New Zealand’s gentailers (retailers that also generate power) have announced big profits for the half-year.
Meridian reported $227 million
Contact reported $205 million
Mercury reported $20 million
Genesis reported $95 million.
We hear the same lines every year. Big profits are needed to fund investment and dividends to attract further investments. While this is true, at some point we must ask why gentailers’ profits are consistently high, but the investment is always coming, never here in sufficient quantity.
Consumers are paying for this through ever-increasing power prices.
New Zealanders are doing it hard
New Zealanders struggled last winter. As many as two-thirds of New Zealanders tried to reduce their energy usage to save money, while one in ten had to borrow money from family or friends to pay their power bill.
Cutting down on energy usage isn’t always as simple as turning off lights or having shorter showers. Our research revealed one in five people went to bed early to keep warm and 19% of people cut back on food or other essentials to pay their power bill.
Is it fair?
Consumer NZ research has found almost half of New Zealanders think the price of their latest power bill isn’t fair.
Plus, over half of people think gentailers’ profit levels are not justified.
Jessica Walker, Consumer NZ Communications and Campaigns Manager says she’s not surprised by those findings – given the social and economic harm high prices are now causing.
“We know the profit announcements have been particularly galling for people who are hearing about them at the same time as they're getting notifications of power price rises. We share their frustrations.”
The market is no longer just failing to deliver benefits. It is actively inflicting harm on those who can least absorb it, while dragging on the wider economy.
It’s time to fight for change
In a modern industrialised economy, affordable energy does not feel like an outrageous ask. And New Zealanders agree, with over two-thirds of people saying they think the government should do more to ensure New Zealand has enough electricity to meet future demand.
“That’s why our team is working on an advocacy campaign that will call for a fairer system, so everyone can afford the power they need,” Walker says.
Consumer NZ wants to see:
A government-led, cross-party national energy strategy to plan for the future, fix the system and bring prices down
An open market. The four gentailers control almost 90% of the market. It’s difficult for innovative and low-cost retailers to enter the market – which means prices stay high
A fairer share of gentailer profits reinvested in new generation – and incentives for individual households to help the system through small scale domestic generation and use management systems.
If rising bills have hit you hard, head to Powerswitch, our independent power plan comparison website. People who switch save on average $400 a year.
Could your next power bill be smaller?
Powerswitch is the free, independent way to check your power plan in just 3 minutes, and see if you could save - backed by Consumer NZ.
