Pulse Calls for Investigation into Electricity Market Price

Pulse Calls for Investigation into Electricity Market Price Surges

Pulse Utilities, New Zealand’s fastest growing independent electricity retailer today called for an immediate investigation by the Electricity Authority into current highly inflated wholesale electricity prices. Recent prices have reached record levels despite the fact that hydro storage remains at average levels.

Spot prices have risen from a daily average of above $140/MWh earlier last week to a high of almost $308/MWh in recent days. Pulse’s Managing Director, Dene Biddlecombe, says that despite reasonable supply levels, the sudden spike in electricity spot prices indicates that the New Zealand electricity market is not working in its current format. He believes the Electricity Authority “should immediately investigate what could be manipulation of the electricity markets.”

Biddlecombe says this situation makes it very difficult for electricity retailers to cover prudential calculations on future spot market settlements and is precisely the situation the Government’s recommended reforms of the electricity market set out to avoid. He says Pulse fully supports Minister Gerry Brownlee’s recommendations aimed at improving liquidity in the electricity market.

Two of these reforms are the sale of Tekapo’s A & B power stations to Genesis Energy and the sale of Whirinaki station to Meridian, which would ensure that no one generator would dominate the market in terms of controlling wholesale electricity prices.

Biddlecombe concludes that “guaranteed supply at a reasonable price is still one of the major barriers to market for smaller retailers who would improve competition and force electricity prices down. Continued reform is vital for real market competition to take place and to ensure consumers are paying a fair price for their electricity consumption.”

ENDS

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