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NZ Herald
a day ago
- Business
- NZ Herald
Why our biggest power companies should be broken up (and why they shouldn't) - Power to the People, part 4
Known as gentailers because they both generate electricity and sell it as retailers, the big four have come under increasing attack from their critics as rising power prices squeeze households and businesses alike. These days Bridges is leading the charge. 'Gentailers come up with all manner of clever explanations from high-paying executives about all of this,' the chief executive of the Auckland Business Chamber and former National Party leader told the Herald. 'But as we lurch from crisis to crisis, they are ruling the roost more than ever.' The chamber was a co-signatory of an open letter to the Prime Minister this month calling for market reform. It's the latest in a growing list of public complaints by influential business leaders, politicians, and other campaigners, who say the electricity market is not working for people. Households are now feeling the pain along with businesses, as higher transmission charges drive a 10.4% increase in power bills. Consumer NZ's most recent quarterly sentiment survey in April showed 35% of people ranked the cost of energy as a top-three financial concern, up from 21% last April. The same survey found one in five households have had difficulty paying their power bill in the last year. Many prominent critics, including several smaller retailers, claim the prices are high because our four biggest companies control both the generation and the sale of electricity. Most have suggested breaking up the gentailers as the way to fix it. 'A cynical tactic' - the case for change Under the current system, the gentailers sell the electricity they generate to their retail arms at an Internal Transfer Price (ITP) before the remaining electricity is sold to retailers for spot (floating) or hedged (pre-agreed) prices. In 2022, Flick - which has recently been bought by Meridian - started a petition to split up the gentailers, saying the Internal Transfer Prices gentailers set for their retail divisions were artificially lower because they 'don't include the same costs and risks an independent retailer faces'. Flick said at the time: 'Essentially, gentailers are leveraging their vertically-integrated position to benefit from low electricity prices acquired through inherited assets.' Simon Bridges, CEO of the Auckland Regional Chamber of Commerce, a co-signatory of an open letter to the Prime Minister this month calling for electricity market reform. Photo / Dean Purcell The open letter that Bridges signed to Prime Minister Christopher Luxon suggested a range of reforms, which could include splitting the gentailers into separate generation and retail companies. 'When a handful of companies control both generation and retail supply, the competitive pressures that should attract new investors and drive innovation, efficiency, and fair pricing are severely diminished,' said the letter, which was also signed by the Employers' and Manufacturers' Association, the Northern Infrastructure Forum, Consumer NZ and four other independent power companies, Pulse Energy Alliance, Octopus Energy, 2degrees and Electric Kiwi. When advocacy group Common Grace Aotearoa asked every power provider what initiatives they were taking to curb energy hardship, most pointed to their philanthropic donations and support programmes. Two companies, though, said the issue went beyond each provider, and only market reform would get to the root of high prices. Switch Utilities, owned by 2degrees, said: 'We believe that the real issue is wider than those in immediate hardship. All Kiwis are paying too much for power, and we are strongly championing reform to the electricity market which will deliver greater competition and more affordable electricity.' Electric Kiwi said gentailers' dominance was keeping wholesale power prices artificially high. 'Weʼve long said that the root cause of high-power prices, a key driver energy hardship, is the structure of New Zealandʼs electricity market. 'The dominance of the big gentailers allows wholesale prices to remain artificially high. Itʼs a cynical tactic that is harming New Zealand. We are trying to change that.' While the smaller power companies have an obvious commercial motive in attacking gentailers' dominance, many other politicians and business groups have taken a similar stance. The EA says evidence that gentailers are using market power 'is not well defined, [but] industry consultation has not yielded any evidence to contradict our view that the status quo may be stifling competition'. A review of new regulations by NZIER for the Major Electricity Users Group said gentailers appeared to 'actively take advantage of the additional flexibility from vertical integration to smooth the allocation of wholesale price and volume volatility to their in-house retail divisions'. 'The ITPs for gentailers are estimated to be around $130 to $145 per MWh (megawatt hour, for the year ended 30 June 2024) compared with a wholesale spot price for the year ended 30 June 2024 of about $186 per MWh, and for the 10 months to 30 April 2025 is estimated at $215 per MWh,' it said. Political commentator Shane Te Pou claimed in a Herald column the four gentailers had protected their profits by holding back renewables generation and consents for new generators for years. 'The electricity shortage works for the gentailers,' he said. 'When there's not enough renewable generation, they can run their expensive gas and coal plants. The way the electricity market works is everyone gets paid the price of generating the most expensive unit of electricity. 'So, the best situation for gentailers is most of their power comes cheap as chips, through hydro dams that the taxpayer paid for decades ago and wind farms, but they get paid like it's all coming from gas peaker plants. 'It's this set-up that's allowed the generators to make $7.6 billion in profits over the past decade, according to Council of Trade Unions analysis, and pay out over $10b in dividends.' NZ First MP Shane Jones in Parliament. Photo / Mark Mitchell Current politicians have also weighed in. Associate Energy Minister Shane Jones has called the gentailers 'the most powerful economic institutions in New Zealand beyond the supermarkets and the Aussie banks'. Last August he told RNZ gentailers were not acting 'in a way that enhances competitiveness'. The Green Party's energy spokesman Scott Willis has a member's bill titled the Electricity Industry (Separation of Generation and Retail Businesses) Amendment Bill written last year. And the Organisation for Economic Co-operation and Development (OECD) commissioned a report that said the EA's reviews 'should reexamine separating the generation and retail operations of large electricity companies to boost competition in the futures market and provide industry with more hedging options'. A public poll earlier this year, commissioned by Octopus Energy and conducted by Curia, found 49% of people supported splitting up the gentailers, compared to 16% who did not agree. The remainder, 35% were unsure. The halfway house - a same-price deal As the controversy rages, a Government task force has come up with a compromise proposal to force gentailers to offer the same electricity prices and hedge contracts to independent retailers as they do to their own retail divisions. The Energy Competition Task Force was created by the Commerce Commission and the Electricity Authority (EA), two independent Crown entities, in response to surging wholesale power prices in August last year. The price spiked due to low gas supplies, record-low hydro lakes and a shortage of wind and sunshine. The EA says its proposed regulation would give New Zealanders more competition, more choices and lower power prices. 'We consulted on a proposal to introduce a new electricity industry rule called 'mandatory non-discrimination obligations' that the four large gentailers - Genesis, Contact, Meridian and Mercury – would have to follow," the EA said. 'This new rule would prevent the gentailers from giving preferential treatment to their retail arms for hedge contracts. Instead, they would have to make these contracts available to all industry participants on effectively the same terms as they use when trading internally.' The EA proposed the mandatory non-discrimination obligations as part of its Level Playing Field Measures, which the EA said would 'give all participants equal access to electricity hedge contracts, to increase competition and ultimately give consumers more choices and lower power prices'. The task force is considering feedback to its proposals, and a decision is due in August. Bridges told the Herald he did not necessarily believe the gentailers had to be broken up and remained open to any reform which created a clear delineation between divisions of one company. 'It may be a functional Chinese wall situation, right? Where one part of the business doesn't help the other.' He added he was not necessarily pointing a finger at gentailers. 'They are doing what rational players would do.' 'A chilling effect' - the case against The chief executive of the organisation representing generators and retailers said the EA's Level Playing Field Measures, as proposed, would not bring down power prices. 'Retailers believe the most effective way to reduce electricity prices and address energy hardship is by tackling the underlying causes of rising costs, such as constrained supply, infrastructure investment, and high input costs,' said Bridget Abernethy, chief executive of the Electricity Retailers' and Generators' Association of New Zealand (Erganz). Bridget Abernethy is the chief executive of the Electricity Retailers' and Generators' Association of New Zealand (Erganz). Erganz claimed in its submission that the EA's same-price proposal could increase power prices by 25% - a claim Abernethy said was backed up by a report it had commissioned. 'In 2021, Erganz engaged Dr Richard Meade of Cognitus Economic Insight to review the economic literature on the pros and cons of separating the generation and retail arms of the large generator-retailers. 'Dr Meade's report informed the Erganz submission [on Level Playing Field Measures] and our view that the proposed changes will not lead to better outcomes for New Zealand electricity consumers.' Abernethy rejected calls to split up the gentailers, pointing to the cost involved and the ability of large gentailers to manage volatility and risk. 'This [status-quo] structure has contributed to lower retail prices than would likely result under a separated model,' Abernethy told the Herald. 'Separation would be costly, take years to achieve, and introduce a chilling effect on investment that would slow our journey to a more renewable future. 'Most importantly, it would not address the underlying issues for consumers in hardship and would introduce inefficiencies that would likely result in worse consumer outcomes in the long term.' Abernethy claimed New Zealand already had one of the most competitive electricity markets in the world, with more retailers per capita than the UK or Australia. She also said the generation and retail gross profit margins, as a percentage of sales, had tracked below the all-industries average over the last decade and a half. EA figures showed gentailers' profit margins per megawatt-hour in 2024 had been lower than the smaller companies' margins. And Abernethy hit back at suggestions generators had not invested in new generation. 'Erganz members have spent around $10 billion on energy generation in the past decade, and more than $6 billion will be invested in renewable energy generation between now and 2030. '[And] three of the four large retailers return more than half of their profit to the Government (as a 51% shareholder) for the benefit of all New Zealanders.' Winstone Pulp International's Karioi Pulpmill is was shut down last year. Photo / Alexa Cook, RNZ Bridges hit back with a pointed reference to the series of large business shutdowns driven by soaring energy costs - especially Oji Fibre Solutions closing its paper mill in Penrose, Auckland, and Winstone Pulp International closing two mills in the Ruapehu district. 'The fundamental pushback (from the industry) is that it'll have a chilling effect on the marketplace. My response to that is; well, what about the chilling effect of the wholesale deindustrialisation of New Zealand that's going on right now - not all because of power, but with that being a significant part about it? What about the businesses that are going bust?' Monday: As Kiwis battle rising electricity bills, campaigners call for change Tuesday: Could you get a cheaper plan for electricity? Most companies won't tell Wednesday: Major company moves to stop disconnecting customers in hardship Thursday: Why our biggest power companies should be broken up (and why they shouldn't)
Daily Mirror
4 days ago
- Sport
- Daily Mirror
Barcelona boss explains why Marcus Rashford was given 'biggest humiliation' on debut
Marcus Rashford has joined his new Barcelona team-mates on their pre-season tour of Asia and the Manchester United loanee made his first appearance against Japanese side Vissel Kobe They say it is the biggest humiliation a footballer can experience: being a substitute that, after getting on the pitch, is then subbed off. So why did Hansi Flick bring on Marcus Rashford for 30 minutes on his Barcelona debut - and then take him off again? Rashford, 27, appeared for the first since completing his season-long loan move from Manchester United in midweek, ending his exile at Old Trafford. The forward's transfer - which includes a £26million option to buy - was finalised in time for him to fly to Japan with the rest of Barca's squad, as they embark on a pre-season tour of Asia. First up was a clash with Japanese side Vissel Kobe in a friendly match which was initially suspended before organisers scrambled to make it happen. Rashford was named on the bench by Flick before the German changed his entire line-up at half-time. The United loanee showed promise during his 30-minute cameo, notably playing a crucial role when fellow new signing Roony Bardghji got on the scoresheet in Barcelona's 3-1 win. After defender Jofre Torrents won back possession on the left, Rashford collected the ball and played a perfectly-weighted pass through to Robert Lewandowski. Barca's No.9 then picked out Bardghji on the right, as the former Copenhagen hotshot produced an impressive first-time finish. Seconds later, Rashford was brought off. The England international and Torrents were replaced by Gerard Martin and Pedro Fernandez, scorer of Barcelona's third goal, in the 77th minute. Post-match, Flick was asked about his decision to haul both Rashford and Torrents off after half an hour each. "Rashford hasn't played that much, and we also wanted to give Gerard Martin 15 minutes because he was playing after his injury," the Barcelona manager explained. Which, obviously, makes perfect sense for a player who, just seven days ago, was a member of Manchester United's 'bomb squad' training alone and made to use the club's Carrington training ground when the first-team squad had gone home. For Flick, these early days are about getting Rashford up to speed, slowly but surely, helping him adjust to what he wants. Do it correctly, and it's another match winner among Barca's collection of stars. Subbing him on and then off in a pre-season friendly? Not a problem for the manager nor his new player. Flick was a 'key' reason why Rashford joined the La Liga champions, having led Barcelona to three trophies in his first season. "He was another key factor for me to join Barca," the 27-year-old revealed during his unveiling. "The conversations I had with him were very positive. He has proven to be one of the top coaches... He led a young team to such a successful season and has returned to the preseason wanting more." Rashford's team-mates are already looking forward to playing alongside him. "Rashford is a very talented player," Lewandowski told reporters in Japan. "We played Manchester United two years ago and he was in great form. He can help us and is able to play in different positions." Next up for Barca is a friendly against Seoul in the South Korean capital on Thursday. Rashford will have a reunion with ex-United team-mate Jesse Lingard, who captains the K-League giants.
News18
6 days ago
- Sport
- News18
'Flick's Handbook': Barcelona Head Coach Imposes New 'Lifestyle Rules' For Players
Last Updated: Flick has introduced a rule focusing on players' lifestyles after widespread criticism of Lamine Yamal's 18th birthday party, with the German taking a stricter view on partying. Barcelona head coach Hansi Flick, who is known to be a strict disciplinarian, has added a new rule to his existing handbook for the Blaugrana players to follow as the German has taken a stricter view on partying after widespread criticism of teenager Lamine Yamal's extravagant birthday party did the rounds recently. Flick's 10 Rules for Players When Flick arrived at Barcelona, he introduced 10 rules to raise professionalism in the squad. Players must arrive 90 minutes before training and undergo daily weight checks. Everyone must eat in the team canteen, and on matchdays, the squad takes part in morning warm-ups before meeting at the team hotel. Late-night flights after evening games are banned, with players staying overnight instead. Flick also demands 90-minute intense training sessions, often keeping players at the training ground for five hours a day. Rest days between games are reduced to prioritise training. The German coach replaced fines with personal motivation and keeps a professional rather than a friendly relationship with players. According to Spanish outlet Sport, Flick has now introduced an 11th rule focused on players' lifestyles. After criticism of youngster Lamine Yamal's 18th birthday party, Flick will take a stricter view on partying and off-field distractions. He wants players to show more discretion in their social activities and focus fully on football. Christmas parties will be minimised, and Flick will monitor commercial work that could disrupt first-team schedules. Rashford's Past Issues Marcus Rashford has completed a season-long loan move from Manchester United to Barcelona. The 27-year-old forward called the transfer a 'dream move" and wished United well for the upcoming Premier League season. Rashford had fallen out of favour under new United boss Ruben Amorim and spent the previous season on loan at Aston Villa. Now, Rashford will play under Barcelona manager Flick, who led the club to the La Liga title in his first season in charge. The English star may be in for a culture shock as Flick is known for his strict rules and high standards. Rashford has faced criticism in England for his off-field activities. In 2023, he apologised to then-United boss Erik ten Hag after holding a birthday party hours after a 3-0 loss to Manchester City. In 2024, he was reported to have gone out in Belfast before missing training ahead of an FA Cup match. Rashford's move to Barcelona comes with a clear message: focus on football first. With Flick's strict rules, Rashford's life in Spain is set to be very different from that in England. view comments Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Daily Mirror
6 days ago
- Entertainment
- Daily Mirror
Marcus Rashford immediately given strict new Barcelona dressing room rule to follow
Marcus Rashford was all smiles in his introduction as a new Barcelona player but the England star will have to abide by Hansi Flick's newest strict rule at the Spanish club Marcus Rashford is expected to curb nightlife proclivities after Hansi Flick demanded his Barcelona side keep their partying activities to a minimum. The 27-year-old officially joined the La Liga champions on loan from Manchester United on Wednesday in his first foray into football outside of the UK. Describing the move as a "dream come true", Rashford was handed the number 14 shirt, the same number Arsenal icon Thierry Henry wore during his trophy-laden spell in Catalonia over 15 years ago. While the Englishman will be keen to get his career back on track after a troublesome couple of years at his boyhood club, he'll have to do so while abiding by Flick's stringent rules that he's established at Barcelona. The Spanish giants enjoyed a hugely successful campaign last season, where they won the domestic treble consisting of the La Liga title, the Copa del Rey and the Spanish Super Cup. It may not be a coincidence that the abundance of silverware came after Flick's implementation of 10 strict rules, according to Spanish publication AS. There's since been one more rule added to the German's manager's list and that's to limit the amount of parties his players attend, reports Sport. Given the controversy Lamine Yamal found himself in after it was claimed entertainers with dwarfism had attended his lavish 18th birthday celebration, Flick is keen to avoid the added spotlight on his squad. While it's reported Flick hasn't banned players altogether from enjoying nights out on the town, he's said to have requested his players to have more discretion when doing so while having a greater focus on their footballing responsibilities. Avoiding cameras and attention in the newspapers is of paramount importance for Flick who aims to mount a strong title defence as well as bringing the Champions League trophy back to Barcelona for the first time since 2015. During his announcement as Barca's latest signing, Rashford explained why he chose to move to Spain as he said: "I'm very excited. It's a club where people's dreams come true. They win big prizes and what the clubs stands for really means a lot to me. "It feels like I'm at home and this is a big factor in my choice to come here, because it's a family club, people are comfortable here and it's a good place for players to showcase their skills. I want to say thank you for the warm welcome. It's a different environment for me but it feels like home. "I'm full of excitement and hunger to go out and help this club win. They won so much last year and I can see the ambition is to do better than last year and that is what you want to hear as a player. "It keeps you improving year on year and that's what you need to be - the best version of yourself. So I'm very excited to be here, eager to get the games going and I'm enjoying every minute of it." Join our new MAN UTD WhatsApp community and receive your daily dose of Manchester United content from Mirror Football. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. If you're curious, you can read our Privacy Notice.
United News of India
24-07-2025
- Business
- United News of India
Barcelona cancels pre-season trip to Japan at short notice
Madrid, July 24 (UNI) FC Barcelona's pre-season plans are in ruins after the club was forced to cancel its visit to Japan at short notice due to a contractual problem with the tour organizers. The Barca squad was due to fly to Japan on Thursday morning ahead of a game against Vissel Kobe on Sunday, before travelling to South Korea to face Seoul FC and Daegu FC. However, the Japanese leg of the tour has now been cancelled and the South Korean part is in the balance. "FC Barcelona announces that it has been forced to suspend its participation in the match scheduled for next Sunday in Japan due to a serious breach of contract by the promoter. However, the Club will consider readjusting the South Korean portion of the summer certain conditions are met by the promoter," explained the club in a statement. The cancellation of at least part of the tour is a blow to Barcelona's economy, with the cash-strapped club due to receive an important injection of around 15 million euros for playing the games, but it is also a sporting blow as Hansi Flick's side will have to look for new rivals at short notice as Flick looks to prepare for the new La Liga season. Barca's only other pre-season game that is currently scheduled is against Como on August 10, before the new La Liga campaign starts in Mallorca on August 16. UNI XINHUA RKM
