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


Investigation into electricity market welcome

Friday, 25th November 2005
Investigation into electricity market welcome

“All power consumers will welcome confirmation by the Commerce Commission this week that an investigation under Part II of the Commerce Act into the wholesale and retail electricity markets had commenced”, said the Executive Director of the Major Electricity Users’ Group Ralph Matthes.

Mr Matthes continued, “This investigation is very timely given the inconsistency between the Electricity Commission assessment that both current and forecast physical supply is and will be sufficient whereas current spot prices are at extreme levels.

“The Electricity Commission predicts that even if between now and next winter the worst inflow sequences over the last 72 years were to occur then there would be no risk of blackouts. The Commission models have been widely consulted on; use key forecast data sourced from generators and the models are sufficiently conservative to ensure the Commission takes a reasonably prudent risk adverse stance.

“Lake inflows this year have been relatively low and lake levels are below average. It is reasonable to expect spot prices would be above average to bring on higher cost thermal fuels. However current spot prices appear to significantly exceed the marginal price needed for those thermal fuels. “If there is little risk of blackouts, then the question arises whether generators are using market power to raise spot prices above that expected in a competitive market.

Hence our welcoming of the Commerce Commission investigation into the electricity market. “If spot prices are high due to abuse of market power this has the detrimental effect of manufacturers reducing output beyond the level expected in a competitive market. This results in a loss in GDP, undermines confidence in the market and reinforces the concern of consumers that the hedges they are offered inevitably include a margin reflecting the market power of suppliers,” concluded Mr Matthes.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Infrastructure Commission: Te Waihanga Releases Report On Water Infrastructure

The New Zealand Infrastructure Commission, Te Waihanga’s latest discussion document highlights the importance of current reforms in the water sector. Its State of Play discussion document about water infrastructure is one of a series looking at the ... More>>

Sci-Tech: Perseverance Rover Lands On Mars – Expert Reaction

NASA has landed a car-sized rover on the red planet to search for signs of past life. The vehicle has more instruments than the four rovers preceding it, and it’s also carrying gear that could help pave the way for human exploration of Mars. The ... More>>


ASB: Quarterly Economic Forecast Predicts OCR Hike As Early As August 2022

Predictions of interest rate rises have been brought forward 12 months in ASB’s latest Quarterly Economic Forecast. Chief Economist Nick Tuffley now expects the RBNZ to begin raising the OCR from its current level of 0.25% as early as August ... More>>

Real Estate: House Price Growth Rates In Hawke’s Bay Skyrocket Ahead Of Rest Of New Zealand

Hawke’s Bay is leading the property ‘pack’ proving a post lockdown land of milk and money, continuing to outstrip the rest of the country with the highest annual growth rate in house price values. But experts warn an overheated market is fast ... More>>

ACT: Matariki Almost A Half Billion Dollar Tax On Business

“Official advice to the Government says an extra public holiday at Matariki could cost almost $450 million,” ACT Leader David Seymour can reveal. “This is a perfect example of the Prime Minister doing what’s popular versus what’s responsible. ... More>>

Genesis: Assessing 6,000 GWh Of Renewable Generation Options For Development By 2025

Genesis is assessing 6,000 GWh of renewable generation options for development after starting a closed RFP process with 11 partners. Those invited to participate offer a range of technologies as Genesis continues to execute its Future-gen strategy to ... More>>

OECD: Unemployment Rate Stable At 6.9% In December 2020, 1.7 Percentage Points Higher Than In February 2020

The OECD area unemployment rate was stable at 6.9% in December 2020, remaining 1.7 percentage points above the level observed in February 2020, before the COVID-19 pandemic hit the labour market. [1] In December, the unemployment rate was also stable ... More>>

Stats NZ: Unemployment Drops To 4.9 Percent As Employment Picks Up

The seasonally adjusted unemployment rate dropped to 4.9 percent in the December 2020 quarter, from 5.3 percent in the September 2020 quarter, Stats NZ said today. Last quarter’s unemployment rate of 5.3 percent followed the largest increase observed ... More>>