{"id":566140,"date":"2026-08-11T22:32:13","date_gmt":"2026-08-11T22:32:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/566140\/"},"modified":"2026-08-11T22:32:13","modified_gmt":"2026-08-11T22:32:13","slug":"energy-minister-simeon-brown-puts-heat-on-electricity-companies-to-cut-power-costs-in-line-with-big-falls-in-forward-prices","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/566140\/","title":{"rendered":"Energy Minister Simeon Brown puts heat on electricity companies to cut power costs in line with big falls in forward prices"},"content":{"rendered":"

Earlier this year, Meridian gained approval to access contingent water storage in Lake P\u016bkaki, which has also put downward pressure on forward prices.<\/p>\n

In a letter to Electricity Authority (EA) chairman John Harbord, obtained by the Herald, Brown said he had asked each company to set out the reductions they have made or will make to their retail prices, when those reductions take effect, and how many of their customers will benefit.<\/p>\n

He asked the EA to look at the extent to which the fall in forward and spot wholesale prices was being reflected in retail tariffs across the market, and how quickly that pass-through was occurring.<\/p>\n

Brown also asked whether hedging, contracting or internal transfer pricing arrangements within the big four\u2019s vertically integrated businesses were delaying or dampening pass-through.<\/p>\n

\u201cWithout any prompting from me, a competitive market should deliver lower prices when underlying costs fall and I would far rather see this delivered by competition than any other route,\u201d Brown said in his letter to the EA.<\/p>\n

\u201cI want to understand clearly what the market is doing before deciding whether anything further is required, and our advice is central to that.\u201d<\/p>\n

Last week, the Auckland Business Chamber and the Northern Infrastructure Forum called for big changes to be made in the energy market.<\/p>\n

Chamber chief executive Simon Bridges made a case for separation of the generation and retail functions of the big four \u2013 which control 85% of New Zealand\u2019s power generation \u2013 to intensify competition in the retail market.<\/p>\n

Power prices have been rising, mostly in line with increases in transmission<\/a> and distribution costs, and are expected to keep rising over the next few years as grid operator Transpower and power distributors invest more in the system.<\/p>\n

Stats NZ data for the June year showed the consumers price index rose 4.1% in the June year, driven mostly by fuel prices but also by a 12% increase in electricity costs.<\/p>\n

The power component of household power bills does not tend to change greatly from year to year, shielding customers from the big fluctuations in spot prices that occur over any given time, Greg Sise, executive chairman of consultants, Energylink, told the Herald.<\/p>\n

\u201cAssuming the spot market is sorted out in terms of supply, the pressure will be taken off the market and you will see the contribution of the wholesale prices fall for residential consumers, but they will only inch down,\u201d Sise said.<\/p>\n

\u201cResidential prices have a lag \u2013 they lag on the way up and lag on the way down as well,\u201d he said.<\/p>\n

Meridian Energy chief executive Mike Roan confirmed the company \u2013 51% owned by the Government \u2013 had received a letter from Brown on the subject of forward prices.<\/p>\n

\u201cWe are considering the points raised and look forward to engaging further with the minister,\u201d he said.<\/p>\n

The Electricity Authority (EA) said it continually monitors market behaviour across the electricity system.<\/p>\n

The authority recently asked all electricity retailers for information about the drivers behind price rises and would be releasing the findings later today.<\/p>\n

\u201cWe note that forward prices have fallen considerably this year, and some commercial and industrial users are negotiating improved deals as their contracts expire,\u201d chief executive Sarah Gillies said.<\/p>\n

The authority expects lower wholesale prices to flow through to residential consumers.<\/p>\n

The EA would continue to monitor and regulate the market.<\/p>\n

\u201cThis includes compliance with the new non-discrimination obligations designed to level the playing field, and we will continue to make changes that strengthen competition and put downward pressure on prices,\u201d she said.<\/p>\n

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.<\/p>\n

Stay ahead with the latest market moves, corporate updates, and economic insights by subscribing to our\u00a0Business newsletter<\/a>\u00a0\u2013 your essential weekly round-up of all the business news you need.<\/p>\n","protected":false},"excerpt":{"rendered":"Earlier this year, Meridian gained approval to access contingent water storage in Lake P\u016bkaki, which has also put…\n","protected":false},"author":2,"featured_media":566141,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[13916,1124,8834,6256,138,8556,23852,802,3588,1686,1667,23966,15248,19134,3011,278654,3191,78,296,15220,13457,6722,111,139,69,90,45641,10112,12937,43296,29058,29023,26267,61,14905,102],"class_list":["post-566140","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-asked","tag-authority","tag-big","tag-brown","tag-business","tag-companies","tag-consumers","tag-costs","tag-cut","tag-electricity","tag-energy","tag-enough","tag-falls","tag-forward","tag-four","tag-generatorretailers","tag-heat","tag-in","tag-into","tag-line","tag-look","tag-minister","tag-new-zealand","tag-newzealand","tag-nz","tag-on","tag-passing","tag-power","tag-prices","tag-puts","tag-quickly","tag-simeon","tag-substantial","tag-to","tag-whether","tag-with"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/566140","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=566140"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/566140\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/566141"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=566140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=566140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=566140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}