A top business leader says New Zealand businesses are worried about being identified when sharing their concerns with energy costs out of fear of commercial retaliation from power companies.
Simon Bridges, the head of the Auckland Business Chamber, said it was a “troubling insight” that came out of running a survey on the impact of energy costs on businesses.
“Whether this fear reflects an actual or perceived risk, it points to serious issues with the way market power is being exercised, and is really worrying,” Bridges said.
The Electricity Authority, the country’s electricity regulator, said it’s aware of one business recently requesting a consultation submission remain anonymous because of commercial concerns, but not of any similar concerns from businesses.
Energy Minister Simon Watts called the allegations “disappointing” but hadn’t heard these concerns directly from businesses. He will ask his officials to consider the findings of the chamber.
Meanwhile, the Electricity Retailers’ Association (ERANZ), which represents some power companies in New Zealand, said retailers were focused on the “best interests of their customers”.
The survey was conducted by the Auckland Business Chamber and Northern Infrastructure Forum (NIF) through May and asked about the impact energy costs are having on businesses.
There were 279 responses collected via the Chambers of Commerce network. They mainly came from businesses in the upper North Island, with manufacturing being the most represented sector.
Among the findings, obtained by the Herald, is that 88% experienced an increase in energy costs in the past year, with about 41% describing the jump as large or very large.
About 52% of respondents said they had to increase their own prices as a result, 25% had to cut production and the same percentage needed to lay off staff. The results also showed a little under 20% cancelled or delayed investment.
Further increases in energy costs are expected by 82%, with nearly 79% of respondents calling on the Government to make addressing the issue a high or very high priority.
One Auckland-based restaurant, which shared its story anonymously, said its energy costs had risen approximately 25% in recent months.
“Because the market situation is so tight, and spending power is low, it’s very hard to pass costs on. The only option is to reduce costs by cutting staff numbers, even though that makes it really hard to operate. We’ve cut down from 12 staff to 10.”
NIF executive director Barney Irvine said the survey results underlined the drag effect that energy costs were having on New Zealand’s growth and productivity, and consequently, on people’s livelihoods.
He said businesses were looking for leadership from the Government and said it should adopt the group’s Energy Action Plan, which consists of measures intended to improve resilience and competition.
“The Government has a good sense of what needs to be done to turn the performance of the sector around for the long-term; what’s needed now is swift, decisive action,” he said.
Bridges said one “unexpected, and troubling, insight” that came from the survey process was a reluctance by businesses to be identified when sharing their struggles with energy costs.
The surveyors sought testimonials and feedback from businesses and found a hesitancy by many to speak out.
Bridges said the reluctance was because of a “fear of commercial repercussions”.
“Many of the businesses we spoke to – especially those dependent on gas supply – were really uneasy about speaking publicly, for fear that it could jeopardise their ability to secure future energy contracts with the gentailers, who control close to 85% of the retail market,” Bridges said.
He said it was time the Government had a “good, hard look” at the vertically-integrated gentailer model and its impact on the sector.
ERANZ chief executive Bridget Abernethy said cost-of-living pressures in the electricity sector “reflect those right across our economy”.
“Unfortunately, a shortage of the gas we need to generate electricity, along with increased transmission and lines charges, mean costs are under even more pressure,” she said.
“ERANZ members and other generators are continuing to rapidly build more generation, which is the most effective step to address these cost pressures in the longer-term.”
She said retailers were focused on “the best interests of their customers” and were available to help them with pricing or supply issues.
“We encourage businesses with questions or concerns to talk to their retailer – they are there to help. Our members always welcome engagement and feedback from businesses and industry groups.”
Airihi Mahuika, the Electricity Authority’s general manager of legal, monitoring and compliance, said from August it would have better visibility of high prices for small business customers and unfair contract terms and conditions.
“We are cognisant of higher energy costs and their impact on commercial operations. The authority is committed to promoting a competitive, reliable and efficient electricity industry,” said Mahuika.
She said the Energy Competition Task Force had been established to strengthen market competition.
Businesses worried they face unfair contract terms can raise those concerns with the Commerce Commission, Mahuika said.
Energy Minister Watts told the Herald it was “disappointing hearing such allegations” and he wanted his officials to consider the feedback from the survey.
“We know our electricity market is not functioning as well as it should. New Zealanders need to have confidence that the electricity market is doing its part to deliver on the long-term interests of Kiwis, and that there is enough competition to deliver the affordable prices we need.”
He said the Energy Competition Task Force has been consulting on measures to bolster competition in the wholesale market and was considering a wide range of submissions.
“I have been clear that gentailers must play their part to deliver on secure and affordable energy, and I’m pleased by the actions we’ve seen recently.”
The survey results come as the Government grapples with the performance of the electricity market, including whether the current structure is incentivising or hampering growth as well as competition.
Global consultancy firm Frontier Economics is currently leading a review into the market’s performance, which involves advising on whether the market’s structure is achieving a secure and affordable supply of electricity. Reports are expected to be delivered to ministers by the end of June.
The review was launched by the Government after the “power crisis” that hit New Zealand last winter when energy costs rose significantly amid low hydro-lake levels, a lack of wind and sun and what was considered an inadequate supply of natural gas. Several mills closed in the second half of last year, citing in part high power prices.
Resources Minister Shane Jones has been vocal that gentailers are “not offering affordable power”. He believes successive governments have “not done enough” to address structural issues.
In a social media video this week, the NZ First MP was scathing of ERANZ over recent suggestions of price hikes if structural changes to the market were made.
ERANZ this month submitted its thoughts on consultation being undertaken by the Energy Competition Task Force on what’s called “mandatory non-discrimination obligations”.
This would prevent gentailers from giving preferential treatment to their retail arms with hedge contracts and “level the playing field so independent retailers and generators can better compete with the gentailers”, the authority said.
“This would give New Zealanders increased competition and ultimately give electricity customers more choices and lower power prices.”
ERANZ was critical of this proposal in its submission.
The association’s arguments included that reforms were already under way to address concerns about market access and fairness and these should be assessed before others changes were made. It also said the authority should wait for the Government-commissioned market review to finish.
“The suggestion that gentailers are cross-subsidising their retail arms through internal transfer pricing is both inaccurate and misleading,” the submission said.
“Rather than constituting a subsidy, the co-ordination between generation and retail operations reflects an efficiency dividend that is ultimately passed through to consumers in the form of lower, more stable prices.”
ERANZ said the gentailers’ role is to absorb price spikes and displacing this “risks greater price volatility and worse outcomes for consumers”.
“If the authority’s non-discrimination proposals are implemented as proposed, there is a strong chance that household electricity bills would increase,” ERANZ said.
It said separation of the generation and retail arms of the companies would force the retail side to make a profit itself, leading to higher consumer prices, which it said some analysts predicted could be as high as 25%.
Gentailers and the ERA have no mandate to threaten the livelihood of Kiwi households.
Posted by Shane Jones on Sunday 25 May 2025
But in his video, Jones said the statement was “designed to undermine” him and the Government’s “willingness to restructure the electricity sector so we get affordable power, so we get secure power”.
“You and I and our businesses are struggling at the moment to cope with intermittency, poor electricity outcomes. Do not take a single slither of notice from this ERA organisation,” he said.
“They have no mandate to threaten the livelihood of Kiwi households. They have no mandate to undermine industry with threats of power prices going up.”
Abernethy told the Herald that ERANZ believed everyone had the “right to express their views on the electricity system”.
“This includes making submissions on proposed changes to the rules governing participants. ERANZ uses all the evidence and expertise at its disposal to participate in an open discussion about the best outcomes for New Zealand consumers.”
Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office. In 2025, he was a finalist for Political Journalist of the Year at the Voyager Media Awards.
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