Our state-controlled gentailers (the companies generating electricity as well as selling it to consumers) have created an oligopoly, undermining business certainty and leaving regions vulnerable to catastrophic power failures.
When Cyclone Gabrielle devastated Hawke’s Bay in February 2023, communities were plunged into darkness for weeks. The centralised grid proved helpless against nature’s fury while gentailers continued to profit from undamaged regions.
This isn’t isolated failure. It’s the predictable consequence of centralisation designed for corporate convenience rather than resilience.
The gentailers – Genesis Energy, Mercury Energy, Meridian Energy and Contact Energy – control approximately 85% of the generation and retail markets. The Government owns 51% stakes in three of them, creating a major conflict of interest in which the referee owns most teams in the league.
It’s a state-protected illusion of choice. As power bills have risen by $10 a month since April because of regulated increases, customers can supposedly switch providers. But when all the big providers co-ordinate similar increases, what “choice” do we have?
Three of the four companies reported record profits in 2024: Contact Energy $235 million (up 85%), Mercury NZ $290m (up 159%) and Meridian Energy $429m (up 300%).
Genesis’ profits were down 33% in 2024, but were still $131.1m, and have since risen again in 2025.
Combined, they posted $1.08 billion in profit in 2024 while manufacturers closed plants because of unaffordability.
NZ was built on low-cost energy to attract global businesses.
Now, with Prime Minister Christopher Luxon acknowledging that power prices are “among the highest in the Western world”, manufacturers are departing. Energy costs rose a widely cited 600% since 2021, the cause cited for major closures.
The gentailer oligopoly represents an indirect tax disguised as market returns.
When state-owned enterprises deliver billions to Government coffers, politicians avoid raising tax rates while extracting revenue from every household through inflated electricity prices.
Here’s the regulatory elephant in the room: the “one ICP (Installation Control Point) or provider” rule that locks consumers into single-provider dependency.
This artificially prevents households and businesses from buying electricity from multiple sources, eliminating true competition at the consumer level.
Kāinga Ora received an exemption from this rule in 2023-24, proving competitive choice is possible when bureaucratic barriers are removed.
If state housing can access competitive electricity markets, why can’t everyone?
The Electricity Authority recently announced new rules requiring gentailers to offer “non-discrimination” in hedge contracts – fixing the symptom while ignoring the disease.
Critics warn these measures could backfire, pushing up electricity prices as gentailers raise internal costs rather than lowering external ones.
Regulatory tinkering sidesteps the fundamental problem: vertical integration allows gentailers to manipulate both sides of the market.
Real reform requires abandoning the failed “bigger is better” approach.
With a stroke of the legislative pen, the current “one ICP or provider” rule could be swept away, allowing consumers to decouple from single-provider dependency.
True energy democracy means communities generating power through local renewable resources and selling excess back to competitive retailers who don’t control generation.
The Commerce Commission’s approval for Contact Energy’s acquisition of Manawa Energy (formerly Trustpower) represents another step towards market concentration.
This feels, to me, eerily reminiscent of Progressive Enterprises’ acquisition of Woolworths (NZ) Ltd in 2002, from which promised efficiencies never materialised for consumers.
Instead, we got a duopoly making $430 million a year in excess profits – $1m a day at consumers’ expense.
This grocery duopoly now ranks among the world’s most expensive markets, with prices 3% above the OECD average.
Despite the Government’s latest announcements about “levelling the playing field”, power industry critics worry that proposed changes won’t crack down hard enough on the big four.
The planned changes preserve the fundamental structure that creates the problem.
New Zealand faces a choice: continue protecting state-owned energy giants that extract maximum profits from captive consumers, or embrace distributed energy systems with clear separation between generation and retail.
When communities control their energy future, the gentailers lose their power over New Zealand’s economy.
It’s time to choose freedom over monopoly, resilience over vulnerability, and competition over state-protected oligopolies.
Nick Stewart (Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha) is a fiduciary financial adviser and CEO at Stewart Group, a CEFEX & BCorp certified financial planning firm in Hawke’s Bay and Wellington, providing wealth management, insurance and KiwiSaver services.
