Meridian Energy's denying its purchase of Flick Electric is a takeover by New Zealand's big power companies.
The power gentailer is paying $70 million to Z Energy for Flick's 41,000 electricity customers and the brand.
It'll increase Meridian’s market share to 18%, maintaining its position as our fourth largest electricity retailer.
Meridian Energy Chief Customer Officer Lisa Hannifan told Ryan Bridge this isn't about market consolidation.
She says Flick wanted to leave the market to focus on transport and EVs, so they're pulling out of New Zealand and Australia.
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Episode Transcript
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Speaker 1 (00:00):
The rumors were true. Is Z Energy's power company, Flick,
has bowed out of the market forty one thousand customers.
They're going to move to Meridian, who bought it for
seventy million. The market now dominated by the four major
gen tailors and the various brands under which they sell electricity.
Lisa Hannafan, the Meridian chief customer officer, with me this morning. Lisa,
good morning, Good morning Ryan. Is this going to mean
higher prices for the market now that it's more consolidated
(00:23):
and we have fewer retail options?
Speaker 2 (00:26):
I don't think so. I think that New Zealand's actually
really well served with the amount of competitors we've got.
We've got more in New Zealand per capita than both
Australia and the UK, and we all compete pretty fiercely
out here.
Speaker 1 (00:39):
But we've you've just consolidated. You're taking on what an
eighteen percent market share?
Speaker 2 (00:45):
Is there?
Speaker 1 (00:46):
What you've got?
Speaker 2 (00:48):
That's right? Well, once we've acquired Flick, we'll have eighteen percent,
so that will leave us in our normal position, which
is the fourth largest electricity retailer.
Speaker 1 (00:56):
And you don't think it's going to have any effect
on prices.
Speaker 2 (01:00):
I don't think it is. No. No, I think that
we're all fighting for every customer that we get, and
we know that customers expect really good value for money,
So we think that our pricing is really fair and
that our new Flick customers will be really well served.
Speaker 1 (01:19):
Do you give as a business preferential hedge deals to
your retail alarm? This is what the Commerce Commission says
you do.
Speaker 2 (01:27):
Yes, we have heard that, but that's not really how
it works. Obviously, we are a vertically integrated business, and
that's actually a really great thing for customers because what
it means is that we can intulate those customers from
the volatility that you do see in a renewables market. So, no,
we don't give preferential treatment. We offer hedges to the
(01:47):
market just like everybody else.
Speaker 1 (01:48):
But are they on the same terms as you would
offer to the smaller players. Because this is the argument,
right that the lights of Fleck have been pushed to
the wall and forced to because they're not getting the
same access to sweetheart deals as if they were a
vertically integrated business.
Speaker 2 (02:09):
Yeah. So one of the things that was really attractive
about the Flick proposition is that they did have a
really sophisticated hedge box, so they were actually really well hedged,
which is just a demonstration that it is possible to
build that really strong book even if you are not
a generator of electricity. So I don't think that is
the case. Flick have decided that they want to exit
(02:31):
the market to focus on what their core business is,
which is transport and EVS, and so they're getting out
of retailing electricity in both New Zealand and Australia. It's
not about a takeover of the gent tailors.
Speaker 1 (02:42):
So if you're telling me that you do not, and
you have never given better terms or conditions on a
hedge deal to your own retail arm than you would
have given to any smaller operator, is the Commerce Commission
lying or wrong?
Speaker 2 (03:00):
I don't think the Comments Commission is lying certainly right. Well,
I don't think that we're saying that. I think how
how vertical integration works is we don't sell hedges to
our retail business. We're one business that generates electricity and
we also retail to our customers, and we have some
internal mechanisms for how that works, but we certainly don't
(03:22):
sell hedges Internally, that's not how it works.
Speaker 1 (03:24):
What are your internal mechanisms.
Speaker 2 (03:27):
So we generate electricity and we sell it on the market,
and we also buy energy and we sell it to
our retail customers, and that's that's how it works.
Speaker 1 (03:37):
Right, So there's no you cannot see where the Commerce
Commission is coming from at all and their complaints and
their their sort of request for change.
Speaker 2 (03:45):
Look, we really welcome any investigation into the industry. We
want it to be really strong and robust. We think
that's really important. Energy is the cornerstone of our economy
and everybody needs to use it in their life. So
we'll welcome any investigation. But I'm really confident that we're
doing the right thing.
Speaker 1 (04:03):
All right, least appreciate you time this wanting. Lexa Hannafin,
Maridy and Chief Customer Officers with us for more from
early edition with Ryan Bridge. Listen live to news talks.
It'd be from five am weekdays, or follow the podcast
on iHeartRadio.
The rumors were true. Is Z Energy's power company, Flick,
has bowed out of the market forty one thousand customers.
They're going to move to Meridian, who bought it for
seventy million. The market now dominated by the four major
gen tailors and the various brands under which they sell electricity.
Lisa Hannafan, the Meridian chief customer officer, with me this morning. Lisa,
good morning, Good morning Ryan. Is this going to mean
higher prices for the market now that it's more consolidated
(00:23):
and we have fewer retail options?
Speaker 2 (00:26):
I don't think so. I think that New Zealand's actually
really well served with the amount of competitors we've got.
We've got more in New Zealand per capita than both
Australia and the UK, and we all compete pretty fiercely
out here.
Speaker 1 (00:39):
But we've you've just consolidated. You're taking on what an
eighteen percent market share?
Speaker 2 (00:45):
Is there?
Speaker 1 (00:46):
What you've got?
Speaker 2 (00:48):
That's right? Well, once we've acquired Flick, we'll have eighteen percent,
so that will leave us in our normal position, which
is the fourth largest electricity retailer.
Speaker 1 (00:56):
And you don't think it's going to have any effect
on prices.
Speaker 2 (01:00):
I don't think it is. No. No, I think that
we're all fighting for every customer that we get, and
we know that customers expect really good value for money,
So we think that our pricing is really fair and
that our new Flick customers will be really well served.
Speaker 1 (01:19):
Do you give as a business preferential hedge deals to
your retail alarm? This is what the Commerce Commission says
you do.
Speaker 2 (01:27):
Yes, we have heard that, but that's not really how
it works. Obviously, we are a vertically integrated business, and
that's actually a really great thing for customers because what
it means is that we can intulate those customers from
the volatility that you do see in a renewables market. So, no,
we don't give preferential treatment. We offer hedges to the
(01:47):
market just like everybody else.
Speaker 1 (01:48):
But are they on the same terms as you would
offer to the smaller players. Because this is the argument,
right that the lights of Fleck have been pushed to
the wall and forced to because they're not getting the
same access to sweetheart deals as if they were a
vertically integrated business.
Speaker 2 (02:09):
Yeah. So one of the things that was really attractive
about the Flick proposition is that they did have a
really sophisticated hedge box, so they were actually really well hedged,
which is just a demonstration that it is possible to
build that really strong book even if you are not
a generator of electricity. So I don't think that is
the case. Flick have decided that they want to exit
(02:31):
the market to focus on what their core business is,
which is transport and EVS, and so they're getting out
of retailing electricity in both New Zealand and Australia. It's
not about a takeover of the gent tailors.
Speaker 1 (02:42):
So if you're telling me that you do not, and
you have never given better terms or conditions on a
hedge deal to your own retail arm than you would
have given to any smaller operator, is the Commerce Commission
lying or wrong?
Speaker 2 (03:00):
I don't think the Comments Commission is lying certainly right. Well,
I don't think that we're saying that. I think how
how vertical integration works is we don't sell hedges to
our retail business. We're one business that generates electricity and
we also retail to our customers, and we have some
internal mechanisms for how that works, but we certainly don't
(03:22):
sell hedges Internally, that's not how it works.
Speaker 1 (03:24):
What are your internal mechanisms.
Speaker 2 (03:27):
So we generate electricity and we sell it on the market,
and we also buy energy and we sell it to
our retail customers, and that's that's how it works.
Speaker 1 (03:37):
Right, So there's no you cannot see where the Commerce
Commission is coming from at all and their complaints and
their their sort of request for change.
Speaker 2 (03:45):
Look, we really welcome any investigation into the industry. We
want it to be really strong and robust. We think
that's really important. Energy is the cornerstone of our economy
and everybody needs to use it in their life. So
we'll welcome any investigation. But I'm really confident that we're
doing the right thing.
Speaker 1 (04:03):
All right, least appreciate you time this wanting. Lexa Hannafin,
Maridy and Chief Customer Officers with us for more from
early edition with Ryan Bridge. Listen live to news talks.
It'd be from five am weekdays, or follow the podcast
on iHeartRadio.
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