Electricity regulator says Fonterra and others can't join wholesale spot price complaint

High electricity spot prices are the subject of formal complaint to market regulator.

Fonterra and Oji Fibre Solutions can't join a complaint to the electricity market regulator about high wholesale spot prices though they publicly support a claim that big generators/retailers are manipulating the market.

The regulator, the Electricity Authority, in an update on the complaint by five retailers, said Fonterra and Oji were not considered formal complainants and were not invited to join the claim of an "undesirable trading situation".

The official claimants are Electric Kiwi, Pulse Energy, Switch Utilities, Flick Energy and Vector, the country's biggest electricity distributor.

The authority said it was continuing to analyse their claim that current high spot prices set by generator/retailers are neither transparent or justified.

It expected to publish a decision before the end of February.

Confirming the identity of the five claimants, the EA said it was aware that other parties, including Fonterra and Oji Fibre Solutions, had publicly signalled they supported the claim.

"However these additional parties are not formally claimants. Unlike a compliance investigation into a breach of the code, we do not invite affected parties to join the claim," the EA said.

A Flick Energy spokeswoman said the EA's statement about Fonterra's status was a surprise.

Flick had understood Fonterra, from its public statement on the claim issue, wanted to "be part" of the claim.

Asked to clarify Fonterra's understanding of its status, New Zealand's biggest company said: "We want to "ensure there is a well-functioning electricity market in New Zealand and we're supportive of the Electricity Authority investigation. This is why support the UTS claim".

Claims the electricity market is not functioning as it should and that the big generation/retailers are manipulating the market resulting in unusually high spot prices, have been swirling for many weeks.

The big companies have responded that the market is working as expected given low hydro lake levels and a gas field problem which meant they have had to use more expensive energy generation sources to provide electricity. The EA has supported their argument.

The retailers' complaint said there has been an unwarranted spot price issue since September 15.

The EA board had considered a draft set of facts and analysis around the claim, and was doing further analysis, the regulator said.