Huia Burt: Electric Kiwi CEO on concerns power market reforms won't create a level playing field

Smaller electricity retailers and generators are worried impending power market reforms won't create the level playing-field promised. 

The Electricity Authority's proposed a non-discrimination rule that will force gentailers to play fair when deciding to sell electricity to itself or other companies. 

Some smaller players, including Electric Kiwi, have written to the authority saying the rule doesn't go far enough. 

Its Chief Executive Huia Burt told Ryan Bridge the rule only applies to leftover electricity. 

But she says that could be a very insignificant amount of the total volume - which doesn't create a level playing field. 

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Episode Transcript

Speaker 1 (00:00):
Bryan Bridge.

Speaker 2 (00:01):
I know smaller electricity retailers and generators are worried that
impending reforms to the power market won't create the level
playing field that we have been promised it will. The
Electricity Authority has proposed a non discrimination rule that will
force the gent tailors to play fear when they're deciding
where to sell power to their own retail arms or
to other retailers. The smaller players Octopus Energy, two Degrees

(00:25):
Electric Kew and some other smaller players. They've now written
to the EA saying this rule doesn't go far enough.

Speaker 1 (00:31):
Who are you Bert? Is Electric? Keywy CEO? And is
with me?

Speaker 3 (00:34):
Now?

Speaker 1 (00:34):
Who are good evening?

Speaker 3 (00:35):
It's good evening, Ryan?

Speaker 1 (00:38):
How much further does it need to go? What do
you want to happen?

Speaker 3 (00:41):
Hey? Look, our proposal for the non discrimination obligations is
that it should apply to all the generation that the
gentailers supply to their own retail arms. In the current
form of these rules, it's only applying to what's called

(01:03):
uncommitted capacity, which could end up being a very very small,
insignificant amount of the total volume, and that just doesn't
create the level playing field that we need.

Speaker 1 (01:15):
Right, what proportion of the output is it.

Speaker 3 (01:19):
We actually don't know the exact proportion, but it could
be as low as zero if you interpreted the rules
to their fullest extent. There is going to be more
debate on this between the industry and the authority in
the coming days, but we think that effectively it's insignificant

(01:40):
to create the level of competition that is going to
create downward pressure on electricity prices for.

Speaker 2 (01:46):
Kiwis and the definition bit to Lucy Goosey for your liking.

Speaker 1 (01:49):
By the sounds of it too.

Speaker 2 (01:51):
We are what about this idea that instead, like in
terms of a consumer, like you know, I buy electricity,
instead of them lowering the price at which they charge
the smaller retailers, they just don't give themselves the same
sweetheart deals and keep the price higher for all consumers

(02:14):
across the board. Yeah.

Speaker 3 (02:17):
So what we think, Ryan, is that the problem. And
I know that there has been a lot of commentary
from the gentail to say, hey, this is actually going
to push up the price of electricity for consumers because
we are cross subsidizing it. We think the problem should
actually be flipped. Why are those contract prices that they're

(02:38):
earning off this generation so high? So it's not that
reta that consumers are the prices that they're paying should
be higher. In fact, they should be much lower, because
we can see that the long run cost of this
generation investment is actually around you know, forty to fifty
dollars permit, what are lower than what the contract market is.

(03:02):
So what we think is what you need is rules
to actually enforce the levels of competition that will bring
those contract prices down and then that's better for all.

Speaker 1 (03:15):
All kiwis how we appreciate your time this evening. How
we both the Electric key we CEO. For more from
Heather Duplessy Allen Drive, listen live to news talks.

Speaker 2 (03:24):
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