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Timeline: government progressively condoning ever-increasing power prices

  • March 2009: SOEs told they must return appropriate dividends to the taxpayer but without ratcheting up prices.
  • July 2009: Genesis Energy says it will progressively retire Huntly coal fired generators unless they improve in profitability.
  • August-November 2009: Genesis withholds generation from the market on several occasions even when a grid emergency is declared. Price spikes gathered some $18m excess revenues.
  • Dec 2009: The Electricity Industry Bill removes “fair” and “sustainable” from the objectives of the regulator.
  • March 2010: Electricity market rules are changed so that the Whirinaki power station no longer puts a lid on spot prices
  • October 2010: the Electricity Industry Bill is passed, with many provisions which enable exercise of market power whenever supply is short.
  • November 2010: Final annual report of the Electricity Commission makes explicit "that the price of electricity needs to reflect the cost of building and operating new generating plant. If that is not the case then new plant won’t be built. "
  • November 2010: new Electricity Authority proposes to interpret its statutory objective more narrowly than stated in the Act. It will not consider transfers of wealth (price gouging, and cross-subsidies from domestic to industrial consumers) in its cost-benefit analyses.
  • December 2010: Meridian withholds hydro generation claiming it's worried about a drought next winter; spot prices skyrocket, creating surplus profits of $24-48 million in three weeks.
  • January 2011: Electricity Authority publishes its investigation of the December high spot prices and concludes they were justified by the risk that there might be a drought six months down the track.
  • February 2011: Authority confirms it will not regulate against price gouging, and will give "reliable supply" greater weight than "price reductions", even though that "may leave some consumers dissatisfied".


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