Electricity Authority announces new rules for big energy retailers
Photo:
Fabian Rieger / 123RF
Big electricity retailers will have to offer cheaper prices for off-peak power use prices, and fair prices to people who sell surplus power to the grid from roof top solar panels at peak times.
The Electricity Authority is changing sector rules to require retailers with more than five-percent market share to offer time of use prices from the middle of next year, after a report by a joint task force of the Authority and the Commerce Commission.
The changes were aimed to give consumers more choice in how and when they use power, and put downward pressure on prices.
"Currently, access to time-varying pricing plans for power use and supply is very limited. The decisions announced today will help drive retail innovation and ensure most New Zealanders have access to these plans within a year so they can benefit from cheaper off-peak power," Commerce Commission chair John Small said.
"They also strengthen the case for rooftop solar systems with batteries, by rewarding people with these systems for the savings they provide the network when selling power into the system at peak times."
Electricity Authority chair Anna Kominik said the changes would give consumers more choices for how they consume and supply power, and reward choices that benefit the system and keep power prices down.
"Consumers who engage as active players in the power market will become important contributors to a more sustainable and dynamic electricity system, and we will all benefit from this through lower power costs," Kominik said.
The changes would directly affect the big four generator-retailers - Contact, Genesis, Mercury, Meridian - which have about 83 percent of the retail market.
In background information, the authority said none of the large retailers offered time of use plans to all customers, and for those that did it benefited owners of electric vehicles.
It said time-of-use pricing would mean cheaper power at off-peak times, and more expensive power at peak times, which it defined as typically on weekday mornings between 7-10am, and evenings between 5-9pm.
Off-peak times were usually overnight, in the middle of the day or on weekends.
It said heavy electricity users would benefit, but those unable to change their consumption habits were unlikely to save money.
Lines companies would also be covered by the rules changes in giving a rebate to consumers who upload power at peak time to the electricity from sources such as solar panels and batteries.
Kominik said the authority would contact large retailers and distributors over the coming months on the changes, which would come into effect the middle of next year.
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