Claims 'market power or abuse' at play in electricity outages

Source: 1News

An independent power company boss has slammed this week's widespread electricity outages as "not good enough".

The rolling blackouts left about 28,000 homes from Whangārei to Wellington without power on Monday.

Various players in the sector, including generators, line companies and grid operators have since blamed each other for the power cuts.

The finger pointing has led two smaller companies, Electric Kiwi and Haast Energy Trading, to lay official complaints about the conduct of Genesis and Contact.

"All this finger pointing is kind of the reason for filing a UTS to actually shine some light on this issue, let's have a transparent view of what's gone on," Electric Kiwi chief executive Luke Blincoe this morning told Breakfast.

The smelter uses up to 14 per cent of New Zealand’s electricity supply every year.

"The reason for lodging the claim is to ensure that there's a really transparent process of investigating what's gone on and we think that the event was caused by the generators failing to generate with plant that they did have available or should have had available."

Blincoe said provisions require Genesis and Contact to offer their generation to the market as if they didn't have market power.

However, he added: "We believe that the way they've offered their plant to the market was in a way in which they did demonstrate market power or abuse market power.

"It's absolutely not good enough, they have an obligation to supply the market, that's what generators do.

"The undesirable trading situation is a mechanism where an event occurs that can undermine confidence in the electricity market and I think we can all probably agree that's occurred."

Blincoe said confidence in the market was "pretty low already" due to the high cost of electricity, and now Kiwis feel they have to worry about security of supply too.

He said structural reform was the only solution that would provide sustainable relief for consumers.

"What I mean by that is breaking up the generators, so splitting up their retail and generation businesses, and probably breaking up Meredian into a couple of smaller generating units to create more tension in the generation part of the market.

"It's not that hard, we've also seen a really good example in the telecommunications industry when the Government split up Telecom into Spark and Chorus. Consumers haven't looked back since then, have they?"

On Tuesday Genesis boss Marc England rejected claims New Zealand had enough power to handle the unprecedented demand on Monday, but that commercial decision had prevented it.

Electric Kiwi chief executive Luke Blincoe has filed an official complaint about the conduct of Genesis and Contact.