Confirmation the electricity market is broken

[king1]

received this email from Electric Kiwi today 
Sorry about the layout being a bit messed up.

Seems to me this sort of a price increase is relying on loyalty which I am not sure exists in the market these days...  

Not far off a 50% price increase across the board.  I like supporting the small players, but loyalty only goes so far - this feels like a death knell for Electric Kiwi and probably the other retail only suppliers...

Important information about your electricity prices
 
 

 

 
We are writing today with some news regarding your power prices and the electricity market.
 
Unfortunately, wholesale costs are soaring like we have rarely seen in New Zealand.
 
What’s going on?
 
You may have seen in the news, and via our public comments that wholesale electricity conditions have recently worsened.
 
On the 18th of July we stopped accepting new electricity customers. When we made this decision wholesale prices had increased by 48% over six months and we’ve seen no improvement in the market since then.
 
As you can see in the below visual, the situation in New Zealand right now is pretty severe.
 

 
Why is wholesale rising so much?
 
We have been saying for years now that market reform is needed in order to stop the market failure and resulting mega-profits for the large gentailers in our industry.
 
In 2023 we raised a complaint with the Commerce Commission regarding misuse of market power in New Zealand energy markets. The Commission agreed there was an issue but passed responsibility for resolution to the Electricity Authority who have the policy tools to quickly enact market reform.
 
Commissioner John Small1 has stated “The wholesale electricity market is of real concern…we think it'll be much faster [to work with the Electricity Authority] than dragging four or five big companies through the courts for three years and then be told that three years ago what you did was illegal. That doesn't solve anything”.
 
Yet what has the Electricity Authority done to address this urgent problem? A year on and nothing has happened.
 
Meanwhile, unsurprisingly, the big four Gentailers - Mercury, Contact, Meridian and Genesis - are making record profits. In FY22 they made $1.9bn, in FY23 they made $2.2bn and all indications are that they’re on track for even larger profits in FY24.
 
New Zealand is in a great position to provide green energy at reasonable prices for Kiwi households and businesses. It will take innovation, integrity, and a market that fosters competition to get us there.
 
Price change notice
 
From 20th September 2024 your prices will change. The average cost increase for customers in your area is 128 cents per day. But you can reduce your costs by moving more power off-peak.
 
We hate doing this, and completely understand if you choose to seek better prices elsewhere. If you are looking around, we would suggest you use Powerswitch. This is a free site run by Consumer NZ that compares electricity prices.
 
Your prices are shown below (excluding GST):
 

Existing

From 20th September 2024

Fixed cost per day:

Current: $1.24

                                                    From 20th September 2024: $0.99
Usage cost per kWh:

Peak: $0.2997
Off-peak shoulder: $0.2098
Off-peak night: $0.1498

From 20th September 2024

Peak: $0.4553
Off-peak shoulder: $0.2732
Off-peak night: $0.2277

 

Peak usage charges apply weekdays 7am-9am and 5pm-9pm. Off-peak night charges apply every day from 11pm-7am. Off-peak shoulder charges apply weekdays 9am-5pm and 9pm-11pm, and weekends 7am-11pm.
 
The amount of change you see on your bill will depend on your usage and how much you use during your Hour of Power and cheaper off-peak times.
 
Simple ways to do this include running the dishwasher, dryer or washing machine off-peak. But there’s a lot more you can do too. We’ve created a handy guide that will help you become a master of load shifting.
 
Electric Kiwi entered the market to make things better for Kiwis. We will continue to advocate for the change that is needed to get this industry back on track.
 
Thanks for being an Electric Kiwi customer. If you have questions for us please reach out.
 
Cheers,
 
Luke Blincoe
Chief Executive
Electric Kiwi
 
1John Small, "Nine to Noon" interview by Kathryn Ryan, Radio New Zealand, July 24, 2024.