Source: Radio New Zealand
Winston Peters said the country was paying some of the highest power prices in the world. RNZ / Mark Papalii
The head of Contact Energy has brushed aside Winston Peters’ claims saying electricity prices in New Zealand are some of the lowest in the OECD.
New Zealand First is campaigning on splitting electricity suppliers into generators and retailers, in an effort to bring prices down.
Yesterday Peters told Morning Report the country was paying some of the highest power prices in the world.
“New Zealanders are being screwed. We’ve gone from being a very competitive pricing regime for New Zealand businesses and houses – in fact it’s a cutting-edge advantage in the good old days, against overseas competition – to now paying some of the highest prices in the world.
“This is a critical industry and [New Zealanders have] lost control of it and they’ve been paying a fortune to many foreign owners as a consequence. That’s the reason why our economy’s dragging along the way it is,” Peters said.
Peters would not be drawn on how companies retailing power – after generating it themselves as wholesalers – would be compelled to step back from the model or how a proposed split would be managed.
“You’ve got these other bodies, the public bodies, saying, oh, this will be too difficult. This will just be, logistically, not possible. The answer is, get out of the way and let people who do know what they’re doing do it,” Peters said.
Peters said the government needed to step in and stop profits from energy supply being funnelled to overseas interests.
Contact dispute Peters’ claim
But on Morning Report today Contact CEO, Mike Fuge said New Zealand First was “tapping in” to concerns over fuel and the conflict in the Middle East.
“We have some of the lowest prices in the OECD. We always rank in the bottom third in terms of affordability and a lot of those other countries that we compete with in that zone are actually getting subsidies, so we’re doing that off our own bat, and I think that’s some thing a lot of Kiwis can be proud of,” Fuge said.
He said the company worked hard to be transparent in their retail arm and investments into power generation.
“We’ve invested $2.4 bil in the last five years with a further $2 bil in the next five years. We’re one of the most scrutinised sectors in this country and the Electricity Price Review looked at us very hard and came up with the conclusion that the gentailers were in the right structure,” Fuge said.
He said New Zealand’s energy prices were dictated by supply and the country needed more resilient and sustainable energy sources.
“With the energy prices globally, Kiwi households are doing it tough at the moment and I think – whether we disagree, and we do disagree, with New Zealand First’s position – they’re tapping into frustration around high energy prices – particularly petrol and diesel at the moment,” Fuge said.
Fuge said – as a wholesaler/generator – Contact had supplied package prices to second tier energy retailers as well.
“The wholesale market we have, [has] helped the growth of a tier two retail sector and we have one of the most dynamic tier two – or separated – retail sectors globally,” Fuge said.
“The reality is we are investing aggressively to bring renewable energy on in this country and the returns we make are actually lower than the regulated section of the industry and lines companies.
“We have brought on over 5% of the total demand in this country in the last five years.
“We are building for ordinary kiwi homes right now. We have already completed significant projects, Tauhara and Te Huka 3 [geothermal power stations which came online in 2024]. We have five projects in train at the moment. We are commissioning the battery at Glenbrook. The fact is we are building and we are building as fast as we can go,” Fuge said.
Fuge said the country’s sustainable energy potential could more than twice exceed the existing market.
“If we can get on and build that we can attract new industries here. We can attract food processing, we can potentially expand the aluminium smelter, we can support data centres.
“There is plenty of electricity to go round. The challenge for the nation at the moment is what’s being imported and what’s going on in the Middle East,” Fuge said.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
