Simon Watts. Photo / RNZ, Mark Papalii
By RNZ
Tougher fines are on the way for electricity providers and retailers that breach the rules, in a move to give the Electricity Authority (EA) more teeth to maintain a fair and competitive market.
Energy Minister Simon Watts said, from next year, heavier duty penalties will increase from $2 million to the highest of three options – a $10m fine, 10% of a company’s turnover or three times the gain made from the breach.
“This is about being a credible deterrent to not meeting the rules and not playing fairly in the market,” Watts said.
“It’s making sure that the penalties and infringements are significant enough to ensure that they are a credible threat.”
He told RNZ that making it the highest of the three meant there was technically no limit to the potential cost power companies may be required to pay.
“No, there’s not, and that is a clear and deliberate decision by government. We want real consequences for any players that are distorting or not playing fairly.
“These are significant increases and changes, which provide real teeth to the regulator.”
In the meantime, from this year the authority will be able to hand out instant infringement fines of up to $2000 for minor breaches.
Final policy decisions on specific offences had not yet been made, but the fines could be useful for cases where companies failed to provide necessary electricity supply information when requested, or failed to inform customers about their energy use.
He said the investigation into the collapse of a power pylon in Northland in mid-2024 had found the EA struggled to compel information from subcontractor Omexom about processes followed.
The new information-gathering powers for the EA would provide access to that information and better inform its analysis, he said.
The increased penalty regime was signalled when the Government responded to the Frontier report in October, rejecting most of its recommendations.
Watts said a stronger EA would improve competition and should mean more affordable power.
There have been calls to split the generation and retail arms of the large power companies, with the aim of increasing competition and lowering prices.
Last year the Auckland Business Chamber released a survey showing 49% of people wanted power gentailers broken up, and 62% wanted the Government to underwrite the cost of new electricity generation.
Watts said the new penalties will match what the Commerce Commission can do and allow better monitoring of the electricity market.
“Kiwis are feeling the pressure of high power bills. The Government is moving quickly to fix this by strengthening the Electricity Authority, which oversees the electricity market and makes sure power companies play by the rules.”
The changes will require amendments to the Electricity Industry Act.
Watts said good progress had been made on National’s energy plan, announced in October.
“These steps are about making sure New Zealand has the affordable, abundant, reliable energy our economy needs,” Watts said.
“It’s critical to have strong leadership at the Electricity Authority to ensure it can support the market to deliver abundant and affordable energy.”
The Government has also agreed to the appointment of new members to the Electricity Authority Board, including Anthony Baldwin, Benjamin Bolot and Murray Parrish.
The additions bring the board back to the statutorily required five members, with Paula Rose and Erik Westergaard, who was appointed deputy chair.
Chairwoman Anna Kominik announced her resignation in October and stopped working for the authority in December.
“The timing of Ms Kominik’s decision was linked to another professional opportunity, and because the time is right following the Frontier Economics Review of Electricity Market Performance,” Watts said at the time.
He confirmed to RNZ that Westergaard would step in as acting chair until a permanent replacement was appointed.
– RNZ