Latest news with #MargaretCooney
RNZ News
15-05-2025
- Business
- RNZ News
Octopus Energy on Transpower warnings of electricity blackouts
money energy 13 minutes ago An Electricity retailer says if the government acts quickly it could reduce the risk of electricity blackouts next winter. Octopus Energy's chief operating officer Margaret Cooney spoke to Corin Dann.
Scoop
14-05-2025
- Business
- Scoop
What Went Wrong For Flick?
Press Release – RNZ It set out to 'disrupt Aotearoa's outdated, self-serving' electricity industry, but is now being folded into one of the country's big gentailers. What happened? , Money Correspondent When it launched in 2014, Flick Energy was something innovative in the New Zealand electricity market. It claimed to be a tech-based company on a mission to 'disrupt Aotearoa's outdated, self-serving industry'. It offered customers something different – a way to purchase power directly from the wholesale electricity market. But this week, it was revealed that Flick's now-owner Ampol-owned Z Energy, would transfer all Flick and Z Energy customer contracts, and the related hedge book, to Meridian, one of the country's big gentailers. So what went wrong? Things first started to wobble in 2017, when a period of high spot prices hit Flick's customers exposed to wholesale electricity spot prices. While it previously said customers had saved an average of upwards of $500 a year on the spot price plan, customers were complaining on social media that they were paying $100 or more for power per week through the price spike. In October 2018, spot prices hit another even higher peak. Since the start of 2021, wholesale prices have been still more volatile. Flick stopped taking new customers in 2021, saying it would not begin again until wholesale prices became more affordable. It did so, but did not offer its wholesale pricing offer, and then stopped again earlier this year. Octopus Energy chief operating officer Margaret Cooney said since Z bought Flick in 2018, the market had been plagued with problems. 'This includes refusals to supply and a margin squeeze whereby wholesale prices have been elevated above the cost of retail, this means mass market retail has been running at a loss – even for the big four gentailers. It looks like Flick has been sold for the long term value of their hedge book. 'Flick's initial model was spot based, it worked for a limited niche, so they evolved to offer a standard fix price offer as well. The initial offer was probably ahead of its time because Tibber and Amber are similar offers internationally and have been very successful. But at the end of the day you can be the most efficient and technically advanced retailer but the wholesale market problems make growth impossible. 'I think the unfortunate thing is that the market is becoming increasingly concentrated on both the generation and retail side at just the time consumers really need the investment from independent generators and retailers to improve the dynamism and affordability of the market.' Cooney said prices would remain high unless there was action on the problems in the market. Huia Burt, co-founder of Electric Kiwi, agreed market conditions had been challenging in the past few years. 'We made the complaint to the Commerce Commission at the end of 2023 that we felt there were two key areas where competition was really being stifled in the market and one was around the refusal or constructive refusal to supply hedge contracts which is being looked at by the energy competition task force. 'There's this retail margin squeeze where effectively the gentailers are cross subsidising profits in general by really keeping a lid on on their retail profits and you could see through the last few years that their retail arms were either making no money or actually making large losses. And that was being subsidised through these huge profits and and generation. So yeah, it's very, very difficult to operate as a retailer.' She said Flick's initial spot price offer was innovative when it was brought to the market. 'That's what we're arguing for about why independent retail is so important because we are focused on thinking really innovatively about what problem does the customer have and how might we be able to solve it? 'So while spot prices might not be for all customers, certainly there may be a segment that that really works for, you know, people who have their own solar panels and batteries for example. That innovation that was brought to the sector by independent retailers like Flick and like Electric Kiwi … That is really, really important for driving our the future of the market in New Zealand.' She said as independent retailers dropped out, it took the price pressure off the bigger players. Electric Kiwi has closed to new customers. Another provider, Raw Energy, is understood to have left the market. Energyclubnz also closed and handed its customers to Contact. 'One thing we do know is that we saw last winter when a lot of the independents closed their doors for some time saying, it's just too risky, that the gentailers at exactly the same time withdrew their most competitive offers from the market, so the top of the market contracted and so that meant if you were moving house, if you were looking around for a new supplier, suddenly you were paying a lot more. Even if a gentailer was offering a good deal, it wasn't as good as it was before.' Paul Fuge, general manager at Powerswitch, said Flick had historically rated well in energy retailer surveys. 'It's disappointing to see it absorbed by a larger player, particularly given Flick customers are typically among the most satisfied. Unfortunately, it's consumers who will bear the brunt of reduced competition yet again.' Meridian chief customer officer Lisa Hannifin said there was still 'really great choice' of retailers in New Zealand. 'There's more retailers per capita in New Zealand than in both the Australian and UK markets.' Any customers still on the wholesale pricing plans will have four months before they move on to a Meridian plan. 'We know that some customers want to control when they use their energy. Meridian has been developing time of use products that can help reduce monthly bills, like the product Flick did have, and these will be available for Flick customers should they select them,' Hannifin said. 'We have two great retail brands that offer a range of products that customers value, but we're still working through options on which brand customers will transition to. We think Flick customers will enjoy the products, service and value that Meridian offers. We've grown our customer base by over 27,000 customers this financial year, which shows that customers are choosing us to be their retailer.'
1News
14-05-2025
- Business
- 1News
What went wrong for Flick Electric?
When it launched in 2014, Flick Energy was something innovative in the New Zealand electricity market. It claimed to be a tech-based company on a mission to "disrupt Aotearoa's outdated, self-serving industry". It offered customers something different - a way to purchase power directly from the wholesale electricity market. But this week, it was revealed that Flick's now-owner Ampol-owned Z Energy, would transfer all Flick and Z Energy customer contracts, and the related hedge book, to Meridian, one of the country's big gentailers. So what went wrong? Things first started to wobble in 2017, when a period of high spot prices hit Flick's customers exposed to wholesale electricity spot prices. While it previously said customers had saved an average of upwards of $500 a year on the spot price plan, customers were complaining on social media that they were paying $100 or more for power per week through the price spike. In October 2018, spot prices hit another even higher peak. Since the start of 2021, wholesale prices have been still more volatile. Flick stopped taking new customers in 2021, saying it would not begin again until wholesale prices became more affordable. It did so, but did not offer its wholesale pricing offer, and then stopped again earlier this year. Octopus Energy chief operating officer Margaret Cooney said that since Z bought Flick in 2018, the market had been plagued with problems. "This includes refusals to supply and a margin squeeze whereby wholesale prices have been elevated above the cost of retail, this means mass market retail has been running at a loss - even for the big four gentailers. "It looks like Flick has been sold for the long-term value of their hedge book. "Flick's initial model was spot-based, it worked for a limited niche, so they evolved to offer a standard fix price offer as well. "The initial offer was probably ahead of its time because Tibber and Amber are similar offers internationally and have been very successful. "But at the end of the day you can be the most efficient and technically advanced retailer, but the wholesale market problems make growth impossible. "I think the unfortunate thing is that the market is becoming increasingly concentrated on both the generation and retail side at just the time consumers really need the investment from independent generators and retailers to improve the dynamism and affordability of the market." Cooney said prices would remain high unless there was action on the problems in the market. Huia Burt, co-founder of Electric Kiwi, agreed that market conditions had been challenging in the past few years. "We made the complaint to the Commerce Commission at the end of 2023 that we felt there were two key areas where competition was really being stifled in the market and one was around the refusal or constructive refusal to supply hedge contracts which is being looked at by the energy competition task force. "There's this retail margin squeeze where effectively the gentailers are cross subsidising profits in general by really keeping a lid on their retail profits, and you could see through the last few years that their retail arms were either making no money or actually making large losses. And that was being subsidised through these huge profits and generation. "So yeah, it's very, very difficult to operate as a retailer." She said Flick's initial spot price offer was innovative when it was brought to the market. "That's what we're arguing for about why independent retail is so important, because we are focused on thinking really innovatively about what problem does the customer have and how might we be able to solve it? "So while spot prices might not be for all customers, certainly there may be a segment that that really works for, you know, people who have their own solar panels and batteries for example. "That innovation that was brought to the sector by independent retailers like Flick and like Electric Kiwi … That is really, really important for driving our the future of the market in New Zealand." She said that as independent retailers dropped out, it took the price pressure off the bigger players. Electric Kiwi has closed to new customers. Another provider, Raw Energy, is understood to have left the market. Energyclubnz also closed and handed its customers to Contact. "One thing we do know is that we saw last winter when a lot of the independents closed their doors for some time saying, it's just too risky, that the gentailers at exactly the same time withdrew their most competitive offers from the market, so the top of the market contracted and so that meant if you were moving house, if you were looking around for a new supplier, suddenly you were paying a lot more. "Even if a gentailer was offering a good deal, it wasn't as good as it was before." Paul Fuge, general manager at Powerswitch, said Flick had historically rated well in energy retailer surveys. "It's disappointing to see it absorbed by a larger player, particularly given Flick customers are typically among the most satisfied. "Unfortunately, it's consumers who will bear the brunt of reduced competition yet again." Meridian chief customer officer Lisa Hannifin said there was still a "really great choice" of retailers in New Zealand. "There's more retailers per capita in New Zealand than in both the Australian and UK markets." Any customers still on the wholesale pricing plans will have four months before they move on to a Meridian plan. "We know that some customers want to control when they use their energy. Meridian has been developing time-of-use products that can help reduce monthly bills, like the product Flick did have, and these will be available for Flick customers should they select them," Hannifin said. "We have two great retail brands that offer a range of products that customers value, but we're still working through options on which brand customers will transition to. "We think Flick customers will enjoy the products, service and value that Meridian offers. "We've grown our customer base by over 27,000 customers this financial year, which shows that customers are choosing us to be their retailer."
Scoop
14-05-2025
- Business
- Scoop
What Went Wrong For Flick?
When it launched in 2014, Flick Energy was something innovative in the New Zealand electricity market. It claimed to be a tech-based company on a mission to "disrupt Aotearoa's outdated, self-serving industry". It offered customers something different - a way to purchase power directly from the wholesale electricity market. But this week, it was revealed that Flick's now-owner Ampol-owned Z Energy, would transfer all Flick and Z Energy customer contracts, and the related hedge book, to Meridian, one of the country's big gentailers. So what went wrong? Things first started to wobble in 2017, when a period of high spot prices hit Flick's customers exposed to wholesale electricity spot prices. While it previously said customers had saved an average of upwards of $500 a year on the spot price plan, customers were complaining on social media that they were paying $100 or more for power per week through the price spike. In October 2018, spot prices hit another even higher peak. Since the start of 2021, wholesale prices have been still more volatile. Flick stopped taking new customers in 2021, saying it would not begin again until wholesale prices became more affordable. It did so, but did not offer its wholesale pricing offer, and then stopped again earlier this year. Octopus Energy chief operating officer Margaret Cooney said since Z bought Flick in 2018, the market had been plagued with problems. "This includes refusals to supply and a margin squeeze whereby wholesale prices have been elevated above the cost of retail, this means mass market retail has been running at a loss - even for the big four gentailers. It looks like Flick has been sold for the long term value of their hedge book. "Flick's initial model was spot based, it worked for a limited niche, so they evolved to offer a standard fix price offer as well. The initial offer was probably ahead of its time because Tibber and Amber are similar offers internationally and have been very successful. But at the end of the day you can be the most efficient and technically advanced retailer but the wholesale market problems make growth impossible. "I think the unfortunate thing is that the market is becoming increasingly concentrated on both the generation and retail side at just the time consumers really need the investment from independent generators and retailers to improve the dynamism and affordability of the market." Cooney said prices would remain high unless there was action on the problems in the market. Huia Burt, co-founder of Electric Kiwi, agreed market conditions had been challenging in the past few years. "We made the complaint to the Commerce Commission at the end of 2023 that we felt there were two key areas where competition was really being stifled in the market and one was around the refusal or constructive refusal to supply hedge contracts which is being looked at by the energy competition task force. "There's this retail margin squeeze where effectively the gentailers are cross subsidising profits in general by really keeping a lid on on their retail profits and you could see through the last few years that their retail arms were either making no money or actually making large losses. And that was being subsidised through these huge profits and and generation. So yeah, it's very, very difficult to operate as a retailer." She said Flick's initial spot price offer was innovative when it was brought to the market. "That's what we're arguing for about why independent retail is so important because we are focused on thinking really innovatively about what problem does the customer have and how might we be able to solve it? "So while spot prices might not be for all customers, certainly there may be a segment that that really works for, you know, people who have their own solar panels and batteries for example. That innovation that was brought to the sector by independent retailers like Flick and like Electric Kiwi … That is really, really important for driving our the future of the market in New Zealand." She said as independent retailers dropped out, it took the price pressure off the bigger players. Electric Kiwi has closed to new customers. Another provider, Raw Energy, is understood to have left the market. Energyclubnz also closed and handed its customers to Contact. "One thing we do know is that we saw last winter when a lot of the independents closed their doors for some time saying, it's just too risky, that the gentailers at exactly the same time withdrew their most competitive offers from the market, so the top of the market contracted and so that meant if you were moving house, if you were looking around for a new supplier, suddenly you were paying a lot more. Even if a gentailer was offering a good deal, it wasn't as good as it was before." Paul Fuge, general manager at Powerswitch, said Flick had historically rated well in energy retailer surveys. "It's disappointing to see it absorbed by a larger player, particularly given Flick customers are typically among the most satisfied. Unfortunately, it's consumers who will bear the brunt of reduced competition yet again." Meridian chief customer officer Lisa Hannifin said there was still "really great choice" of retailers in New Zealand. "There's more retailers per capita in New Zealand than in both the Australian and UK markets." Any customers still on the wholesale pricing plans will have four months before they move on to a Meridian plan. "We know that some customers want to control when they use their energy. Meridian has been developing time of use products that can help reduce monthly bills, like the product Flick did have, and these will be available for Flick customers should they select them," Hannifin said. "We have two great retail brands that offer a range of products that customers value, but we're still working through options on which brand customers will transition to. We think Flick customers will enjoy the products, service and value that Meridian offers. We've grown our customer base by over 27,000 customers this financial year, which shows that customers are choosing us to be their retailer."
Newsroom
13-05-2025
- Business
- Newsroom
Gentailers increase dominance with $70m Flick Electric takeover
Analysis: Z Energy has sold its electricity retail arm and its customers to Meridian, in a $70m deal that will further consolidate the market dominance of the big gentailers. Flick Electric is expected to be shut down. It's disappointing news for small business and residential and power consumers, less than a week after the Commerce Commission cleared Contact Energy's takeover of Manawa. Smaller power retailers warn of rising prices, and already fewer options to switch plans. There are renewed calls for the Government to change the regulatory settings for the power market. If a player as big as Z Energy can't compete in the electricity market, they ask, then who can? Octopus Energy chief operating officer Margaret Cooney calls today's news 'a bugger for consumers'; Electric Kiwi chief executive Huia Burt calls it 'a huge wake-up call'. But if the adverse impact on power prices seems certain, the impact on the country's carbon footprint remains to be seen. Hydro power firm Meridian's power generation portfolio is all renewable (though it does hedge by buying fossil-fired electricity as a backstop). The gentailers will argue they can leverage their bigger customer bases to build much-needed new renewables. And Z Energy says it can now focus its fuel transition efforts single-mindedly on home, business and forecourt EV charging. Although Z Energy is a taniwha in the fuel business, it's a relative minnow snapping at the tail of the big fish in the electricity retail sector. Its electricity retail business, Flick Electric, served 41,430 connections at the last count. With Flick's closure, they'll all transfer to Meridian. That will give Meridian 440,000 connections – that's 350,000 more than the next biggest player. These Manawa and Flick acquisitions consolidate the power generation industry and the retail market in the hands of the same four big players. In total, the four big gentailers – Mercury, Genesis, Contact, and Meridian – will now top 2 million connections (87 percent market share). All the challenger brands combined will provide just 300,000 connections. Subject to regulatory conditions, Z has agreed to sell Flick, and Z's retail electricity assets such as its customer contracts and related hedge book. This doesn't include Z's forecourt EV chargers – so Z and Meridian have also agreed to explore a potential 'fuel and energy alliance'. Meridian will also pay up to $5m for Flick staff to transition customers and systems to the new owner, over the next four to six months. Z bought into Flick in 2017, then Z, in turn, was acquired by the market-listed Australian fuel giant Ampol in 2022. Ampol and Meridian announced the sale on the NZX and ASX on Tuesday morning. Z Energy chief executive Lindis Jones says the company has decided to re-focus its investment where it can make the biggest impact. 'This includes helping make it easier for Kiwis to choose lower emissions transport solutions such as electric vehicles.' He says the firm's focus is now on supporting its people through this period of change. 'Our teams across Flick and Z have done an excellent job in growing our retail electricity customer base,' he says. 'We feel confident our customers will be in safe hands.' Meridian chief customer officer Lisa Hannifin says the acquisition builds on recent months when Meridian and its budget Powershop brand have grown connections faster than others. She says the strategic fuel and energy partnership between Meridian and Ampol will be significant. This means Meridian can help Z Energy with its EV charging and decarbonisation process. Energy minister Simon Watts and his associate minister, Shane Jones, have met electricity industry leaders and expressed their concerns about high power prices. But at UK-owned Octopus, Cooney warns that the price competition and innovation of entrants such as Flick is what kept the big players honest and their prices in check. 'Unfortunately the wholesale market has been plagued by problems including persistent margin squeezes, immature contracting arrangements and refusals to supply,' she says. 'Further consolidation is an outcome of this but it's not a good result for consumers.' If the Government wants to bring down electricity prices, she adds, it must ensure the settings support new entry and investment and end the 'kowtowing to incumbents'. 'Consumers are swallowing massive price increases at the moment which is ultimately the result of industry, regulatory and successive governments' inaction on obvious and well-documented problems with the market,' Cooney argues. 'These problems can be fixed – the question now is whether Watts and Jones are up for it.' Huia Burt says Electric Kiwi is now one of the few independent electricity players left in the New Zealand energy market. Huia Burt (left) and Margaret Cooney argue the Government must impose stronger competition settings to prevent the big four gentailers raising power prices. Photo composite: Newsroom 'We hope our politicians and regulators view this news as a huge wake-up call,' she says. 'For everyone who believes that a competitive electricity market can deliver an affordable, abundant energy future for New Zealand and our economy, this is another strong message to the Government: We need to change things now.' She says challengers such as Flick and Electric Kiwi have driven innovation in the retail sector and put downward pressure on prices. 'Without them, basic economics would dictate that price will grow and service quality will drop. 'The competitive effect of challengers was clear last winter – when smaller players stopped taking on customers, gentailers withdrew their most competitive pricing plans, increasing prices by hundreds of dollars for anyone seeking out a new supplier.' She described Z Energy exiting electricity retail as 'a vote of no confidence in our energy market and the Government's ability to deliver the meaningful reform needed to make it competitive'. New Zealand's electricity market stands at a crossroads, she argues, and she's not convinced by the gentailers' arguments that big customer bases enable them to invest in renewables. 'We either start down the path of strong competition settings to encourage new investment and innovation, or we rely on the four big gentailers to look after us,' she says. 'The issue is, they have underinvested for years because it's in their interests to keep electricity supply tight, which drives prices, and profits, through the roof.' In Australia, Ampol has also announced to the stock exchange that it's agreed to sell it retail power company there, Ampol Energy Retail, to energy retailer AGL Sales, for a nominal sum. It expects to receive pre-tax proceeds of approximately Aust$65m (NZ$70m) as a result of the two transactions on either side of the Tasman.
