Study Into Competition For Small Electricity Consumers

  • Max Bradford

Energy Minister Max Bradford has commissioned a study to accelerate the development of competition for small electricity consumers.

The New Zealand Institute of Economic Research has been commissioned to identify barriers to competition for smaller consumers and assess whether current regulations are enough to prevent abuse of market power in energy distribution and retailing.

Mr Bradford has also asked the NZIER to examine electricity metering options which will bring the benefits of the electricity industry reforms to household consumers more quickly.

"I am very concerned that competition for households and other small consumers is not emerging quickly enough," Mr Bradford said.

"I am also concerned that some power companies are clinging to anti-competitive practices. There are accusations that some companies are inflating charges for the use of power lines in order to stifle competition from outside companies."

Mr Bradford said one option was to break power companies into separate line and energy businesses so line charges could not be used to subsidise energy costs, nor to block access to customers by outside companies.

The NZIER report will also focus on the possibilities created by new electricity metering technology, which has been identified as a requirement to facilitate competition for small consumers.

"Hi-tech electricity metering will open up a world of exciting options for consumers in terms of choice of power supplier, control over power use and price, as well as an array of value-added services," Mr Bradford said.

Mr Bradford said he expected hi-tech meters to become widely available in the near future.

"I have seen several initiatives which will make current electricity measuring and billing arrangements seem as antiquated as crank handle telephones."

The results of the study will form the basis for further initiatives by the electricity industry and the Government to accelerate the development of competition for small consumers.

"I hope all energy companies will pick up the challenge to willingly embrace a fully functioning competitive market," Mr Bradford said.

The NZIER study is expected to be completed in July.