Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

NGC to Exit Electricity Retailing

25 July 2001

NEWS MEDIA RELEASE

NGC to Exit Electricity Retailing and Enters Alliance

Natural Gas Corporation Holdings Limited (NGC) has reached an agreement to sell its 290,000 North Island commercial and residential electricity customers to Genesis Energy. The agreement will take effect from 1 August 2001, after satisfaction of certain conditions. This agreement, following the recent sale of South Island customers to Meridian Energy, means that NGC, operating under the On energy brand, is withdrawing from the electricity retailing market.

The sale will close off NGC’s retail exposure to the wholesale electricity market. Managing Director, Mr John Barton, declined to disclose the value of the transaction. However, Mr Barton affirmed he did not expect the sale would result in any further write down of NGC’s assets. While exiting the electricity retail market, NGC was retaining the majority of the businesses acquired from TransAlta New Zealand last year, he said.

NGC will retain its electricity generation assets and its natural gas customer base of approximately 100,000 industrial, commercial and residential gas users throughout the North Island. NGC will also retain its meter business and, as part of the sale, NGC will acquire Genesis’ electricity meters and provide meter services to Genesis for its residential electricity customers.

A strategic marketing alliance is being formed with Genesis to offer dual fuel and joint promotions to the retail market, under the Genesis brand, for gas and electricity products to existing and new customers. NGC will continue to provide full customer support services for large industrial gas customers.

“We believe that the core gas business of gas transmission, distribution, wholesaling, and sales to industrial customers, combined with the electricity generation and the strategic alliance for gas retail, creates a very sound business for NGC going forwards,” said Mr Barton

Mr Barton said today outstanding progress had been made by On energy to improve customer service since NGC formally took over the electricity retail business last year and it was disappointing to be exiting the business. However, the way the hedge market and spot markets are functioning meant the risks for a net retailer were unacceptable

He said a basic intention of the electricity market development was to encourage retail competition. This was not being achieved. Mr Barton said NGC had decided to exit electricity retailing because it was not confident that the wholesale electricity market provides an environment, now or in the future, for net retailers to compete effectively.

Notwithstanding the sale, consultation and retail advisory arrangements with the Hutt Mana Energy Trust will continue.

There will be a transition period of several months during which NGC will provide Genesis with transitional call centre, billing and credit services. Customers are not required to do anything at this point and will be kept fully informed during the transition process.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


TradeMe: Supply Sees Biggest Jump On Record While Prices Continue To Slump

The number of properties for sale across the country saw the biggest year-on-year jump ever in July, while prices continued to drop according to the latest Trade Me Property Price Index... More>>


Reserve Bank: Ongoing Monetary Tightening
The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 3 percent from 2.5 percent. The Committee agreed it remains appropriate to continue to tighten monetary conditions... More>>



Statistics: Weekly Earnings Rise As More In Full-time Employment

Median weekly earnings from wages and salaries rose by 8.8 percent to $1,189 in the year to the June 2022 quarter, Stats NZ said today... More>>



Electricity Authority: Imposes Interim Restrictions On Very Large Electricity Contracts

Consumers of electricity will be protected from potentially paying more than they should due to the impact of very large electricity contracts on wholesale prices, under urgent changes announced today by the Electricity Authority... More>>


Westpac: Economic Overview, August 2022 – Pushing Through

The New Zealand economy faces some lean growth in the year ahead as households’ budgets are squeezed, according to Westpac’s latest Economic Overview... More>>


Kiwi Group Holdings: Fisher Funds Acquires Kiwi Wealth Business

Kiwi Group Holdings Limited (KGHL) today announced the sale of Kiwi Wealth to Fisher Funds for NZ$310 million... More>>