New Zealand\u2019s gentailers, not consumers, need to pick up the bill for increasing electricity costs, according to Energy Minister Simeon Brown.<\/p>\n
The Government has backed down from applying a levy<\/a> to electricity to cover the costs of the planned liquefied natural gas (LNG) import facility in Taranaki.<\/p>\n Brown announced this while speaking at the Auckland Business Chamber on Tuesday. The Government now intends to sign a contract with a preferred LNG provider before the general election in November and have the new facility \u201coperational\u201d in 2028<\/a>. Previously, the Government had forecast the import facility opening in 2027<\/a>.<\/p>\n Brown, became Energy Minister in April for the second time, said that high energy prices cost New Zealand\u2019s economy an estimated $5.2 billion in lost GDP in 2025 and the risk of a dry year is \u201cpriced into every power bill\u201d.<\/p>\n \u201cPeople have been paying for the dry year risk, even in the years where there hasn’t been a dry year, and when a dry year does eventuate, we see an even more extreme impact on prices,\u201d he said.<\/p>\n In February, when Simon Watts was still Energy Minister, the Government announced the new LNG import facility would be paid for via a levy on electricity. At the time, Watts had put the cost of the LNG terminal at \u201cnorth of a billion dollars.\u201d<\/p>\n \u201cThe levy for the infrastructure is paying for the insurance that LNG provides. It is therefore appropriate that the electricity system bears this cost,\u201d a government fact sheet said at the time<\/a>.<\/p>\n ‘The responsibility sits with the gentailers to pay to manage dry year risk’<\/p>\n But following his speech on Tuesday, Brown told reporters: \u201cNew Zealanders know that the responsibility sits with the gentailers to pay to manage dry year risk. It’s their obligation, it’s their responsibility.\u201d<\/p>\n The gentailers are companies that both generate electricity and sell it to consumers such as Contact Energy, Genesis Energy, Meridian Energy and Mercury Energy. Genesis, Meridian and Mercury are majority government owned.<\/p>\n Asked if Watts, the former Energy Minister, got it wrong by proposing a levy as a way to pay for the terminal, Brown said the Government had still been \u201cworking through the detail\u201d at the time.<\/p>\n \u201cWhat we’re saying here is actually the power companies who make significant profits, they are responsible for managing the dry year risk in New Zealand, and the government is saying very clearly they will be required to pay for this,\u201d Brown said.<\/p>\n \u201cWe are putting the responsibility where it sits very firmly in their camp, not on the power bills of customers.\u201d<\/p>\n