Electricity market stays static

Incumbent power companies are largely unchallenged on their home patches, an Electricity Commission study shows.

It also found the rate of customer switching between companies is less than 1 per cent a month.

The data - the first collected on the market - will be of interest to regulators at the Commerce Commission, which is in the midst of a probe into whether there is enough competition in the electricity sector.

TrustPower spokesman Graeme Purches said the scrutiny was welcome, since there had been criticism of the level of competition among power companies.

In every residential market where TrustPower was operating, it was competing against at least two rivals. But many customers who left TrustPower had since returned, after concerns about service.

There was little difference in the price of power offered by the rival companies, said Purches. Many people preferred to get their electricity from a company that was a major player in their area.

Commissioner Roy Hemmingway said the commission was not sure if the switching numbers published were a true indicator of the state of competition, but it was important they were publicly available.

Other methods of determining competition could be existence of price differentials or inquiries into websites that compared prices. The numbers largely related to the residential market.

"Retail contestability" was one of the showpieces of what came to be known as the "Bradford reforms" of the energy sector introduced under former National Energy Minister Max Bradford.

But customers hoping to change retailers found inadequate systems and procedures, leading to a range of problems with confusion and late billing.

Although problems with switching have now largely been solved, the industry itself has changed, with all the five big power companies now "vertically integrated".

They are generators as well as retailers, with the amount of power sold to consumers matched by the amount of electricity generated by the other arm of the company.

The Whangarei-based Northpower area has the lowest level of incumbent domination - where Meridian finds itself the only retailer not to have a more than 50 per cent market share.

The highest level of market domination is in the eastern Bay of Plenty, where the Todd-owned Bay of Plenty Energy has 96.9 per cent of all power connections.

Other power companies have challenged Bay of Plenty Energy over its refusal to allow access to the power meters inside customer homes.


POWER SHARE

* Lowest: Northpower - 49.9 per cent (retailer: Meridian)

* Highest: Horizon Energy - 96.9 per cent (retailer: Bay of Plenty Electricity, owned by Todd Energy)

* Vector - 78.9 per cent market share for incumbent (retailer: Mighty River Power)

* Powerco - 78.6 per cent - (retailer: Genesis)