Auckland's biggest electricity retailer, Mighty River Power, has asked the Government for incentives for its long-term customers to buy shares when it is partially privatised this year, the Herald understands.
Mighty River will be the first of three state-owned power companies - with coal miner Solid Energy - to be partially sold to investors under the National Government's mixed-ownership model.
The sale or initial public offer (IPO) of up to 49 per cent of Mighty River is expected to be completed in November. Its board and management are working out details of the IPO process with Treasury officials, investment banking advisers and sharebrokers.
The Herald understands that during those talks Mighty River, which sells power in Auckland mostly under its Mercury Energy brand, has sought incentives for its long-term customers and staff to buy shares that would not be available to the rest of the public.
It is not clear whether the Treasury or Government are willing to back the proposal but officials opposed a wider proposal for share incentives for customers of all the power companies when they are partially privatised.
It was feared customers would switch suppliers just to benefit from those incentives.
A Mighty River spokeswoman said yesterday the company was talking with the Crown and its advisers "on a range of options to be considered by the shareholding ministers".
"Securities law means we are unable to talk about those discussions."
Through a spokeswoman, State Owned Enterprises Minister Tony Ryall said he and his Cabinet colleagues had made no decisions about retail share incentives.
But it seems small-scale buyers are likely to be prevented from "double dipping" by buying shares directly and also via a broker.
The Government and its advisers are considering a range of measures to sweeten the deal for retail or "mum and dad" investors.
They include a higher minimum allocation of shares for investors who register their interest early, price discounts and a shareholder loyalty scheme.