Karen Boyes: Major Electricity Users' Group Executive Director on wholesale electricity prices falling

Lower power bills are on the way for commercial customers, but a longer wait's in store for the average household.  

Meridian Energy says 2027 forward wholesale prices have fallen more than 35% since April. 

Chief Executive Mike Roan says it'll fall 15% over the same period for 2028 and 2029 as renewable energy's built.  

But Major Electricity Users' Group Executive Director Karen Boyes told Mike Hosking homes won't feel that immediately.  

She says it's favourable conditions with hydro lakes full and a pipeline of projects, but it'll take a while to roll through. 

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Episode Transcript

Speaker 1 (00:00):
Right. They tell us power prices are finally coming down.
You're hearing this correct coming down. Investment and renewables capacity,
all that stuff we've talked about for years finally paying off.
Meridion tells us commercial prices they're already falling. Forecasts into
next year. We've got the wholesale numbers down thirty five percent.
Karen Boys is the ED at the Major Electricity Users
Group and as well as Karen Morning, Good morning. So

(00:22):
for you guys the major users, it's real? Is it real?

Speaker 2 (00:26):
It's starting to look real. So many of our members
that you're long contract, long term contracts for three to
five years, so many aren't coming up to renewing them, yeat,
but they're seeing positive signs when they look at the prices,
it does look like it's turning around.

Speaker 1 (00:40):
And as much as thirty five percent. If I had
a contract coming up in February, would I be expecting
a major drop in the cost of my power.

Speaker 2 (00:48):
In the generation cost? Yes, but you're still going to
see increases in transmission and distribution. And this is where
I come back to your seeing some improvements, but will
you actually see it on your bill?

Speaker 1 (00:58):
Well, this is where it gets fat this is what
I would call the small print. So Generation makes up
thirty eight percent of your overall bill, which, as it
turns out to the bulk of it, isn't it, because
I mean transmissions eight, distributions twenty four, retails eleven, and
all the jiggery pokery is eighteen. But thirty eight is
a major component on any bill. So you should see that,
shouldn't you.

Speaker 2 (01:18):
You should start to see it. It just depends when
you start to renew your contract. And you've got to
remember that these prices have been at record high as
at twenty four to twenty five. So I said, while
it's coming down thirty five percent, it has certainly gone
up to much higher number. So it's an improvement, but
it's still going to be a while to see it
on your final bill.

Speaker 1 (01:38):
And when will I see it at home? Do you reckon?

Speaker 2 (01:42):
I'd say it will take a while. I mean, we're
in favorable conditions with what good full Lakes. I think
we've got a pipeline of projects, but it is going
to take a while for it to roll through.

Speaker 1 (01:50):
So it's two years away, I would hope.

Speaker 2 (01:53):
Not years away. But I think you've got Generation coming
down at the same time as transmission and distribution going up.
So I think you might see a slow in your increase,
but I think we are still a long time away
from getting back to the average sort of prices that
industrials were facing, and certainly residential prices.

Speaker 1 (02:11):
When do you reckon we reach abundance? Will we ever
reach abundance? You know? In other words, we've got so
much power we don't know what to do with it.

Speaker 2 (02:19):
I think until we start changing how we approach the market.
So we take a model where we build in advance,
and that includes not only generation, but transmission and distribution.
So I think to build an advance and heaven abundance
does require some good hard thinking from government about how
they approach settings.

Speaker 1 (02:37):
Couldn't agree with you more. I'm going to talk to
Luxon about this on Monday. Karen Boys, who's executive director
of Major Electors the Users Group. By the way, the
average wholesale price is at sixteen this past week, sixteen
o megawatt compared with one fifty in recent winters in
that famous eight twenty and twenty twenty four, So it's
gone from eight twenty to sixteen. So you can see
there there's some savings to be had, but the transmission

(02:59):
at eight and the distribution at twenty four, that's all
your retailers. And this I worry about this ongoing forever argument,
which is, oh, yeah, that bit's coming down, but unfortunately
the other bit's going up. And when I said, jiggery
pokery metering and levees, eighteen percent of your bill is
metering and levees. And you think that's ever coming down. No.
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