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Power switch competition working

Hon Tony Ryall

Minister for State Owned Enterprises
18 June 2012 Media Statement
Power switch competition working

“It’s not who owns the energy companies that influences prices, but the regulatory environment which the National Government changed to increase competition, says State Owned Enterprises Minister Tony Ryall.

“And it is working. New Zealanders are increasingly taking advantage of that change and are switching companies for a cheaper deal.

“ Treasury advises that in the 12 months from May 2011 to April 2012, 422,256 customers changed electricity retailers (or an average of 35,188 each month)

“Consumer New Zealand chief executive Sue Chetwin has said New Zealanders are starting to realise that there was usually a cheaper option available and that some households can save in the hundreds.

“And the cheapest option is often a private power company,” says Mr Ryall.

“Treasury advises there are 21 regions listed on the Consumer Institute's Powerswitch website. In 14 of these regions the cheapest electricity company is privately owned, in 1 the cheapest company is owned by a council, and in the other 6 an SOE is cheapest.”

“Private companies are currently the cheapest in Auckland (central & Manukau), Hamilton, Christchurch and Dunedin. Going through all of the other regions listed on the Powerswitch website, private companies are also currently the cheapest in Northland, Whangarei, Drury, Counties, Waikato, Hutt Valley/Porirua, Golden Bay, Marlborough, Nelson City and Stoke (Tasman/Nelson Districts).

“And minority private share holdings in the SOE electricity companies will not change the best interests of these companies or the obligations of their boards. Boards are legally obliged to act in the best interests of their companies, NOT their shareholders,” says Mr Ryall.

All figures are the latest prices from the Powerswitch website and are based on an average annual consumption for a medium sized household (the exact consumption figure varies by region).

“We are offering minority shareholdings in the four energy companies to stop extra borrowing from overseas, to control our debt”, says Mr Ryall.


Pre-Prospectus Disclaimer

The Crown is considering offering shares to the public in one or more of Genesis Power Limited, Meridian Energy Limited, Mighty River Power Limited, Solid Energy New Zealand Limited and Air New Zealand Limited. No money is currently being sought and no applications for shares will be accepted or money received until after an investment statement containing information about the relevant offer of shares is available.

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