Energy minister's eye on competition

Energy Minister David Parker will examine whether there is a lack of competition in the wholesale and retail electricity markets.

Parker said he shared the concerns of large industrial electricity users and households about the effectiveness of power markets.

"Do we have real competition in the wholesale electricity generation market and the retail electricity market?"

He had not concluded that the electricity markets were uncompetitive. "I think there is an issue that needs to be investigated."

The Dunedin Labour list MP - who is also the new Transport Minister, Attorney-General and climate change boss - said he entered politics after being "incensed" by the National Party's reform of the electricity industry in the 1990s.

When the New Zealand Electricity Market was set up in 1996, it was expected a liquid market for the future supply of large amounts of electricity at fixed prices would develop to complement the spot market.

That hasn't happened and large energy purchasers who want to avoid exposure to spot prices have to contract directly with generators.

Meanwhile, consumer groups say the lack of real competition in the retail market means households have faced a relentless and hefty increases in charges.