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Market Manipulation in the Energy Sector

Rt Hon Winston Peters, Deputy Prime Minister, Minister of State Owned Enterprises

The Minister for State-Owned Enterprises Winston Peters, has expressed an equal measure of shock and concern at the recent Electricity Authority Board’s preliminary finding that Meridian Energy was involved in an ‘undesirable trading situation’ during December 2019.

Between December 3 and 18 last year Meridian spilled water from their hydro generation stations while simultaneously offering this generation into the spot market at prices above their short-run marginal cost.

‘It is utterly unacceptable that Meridian Energy have been found by the Electricity Authority to have, essentially, gerrymandered the market for profit, stated Mr Peters.

‘The Meridian Board Chair and Chief Executive have been told to front up to my office and explain themselves before the House rises on August 6.

‘It is a damning preliminary finding by the Electricity Authority and there is something very wrong with the regulation of the energy market when it takes a complaint for market manipulations to be investigated and acted upon.

Mr Peters added, ‘The John Key Government’s mixed-ownership model in the energy sector was always a recipe for disaster for consumers and so it is proving.

‘Spilling water while generating below capacity resulted in higher wholesale prices as well as relying on more costly coal-fired generation out of Huntly power station.

‘As one complainant put it, the result of Meridian’s action was about 6000 tonnes of additional carbon emissions, the equivalent of about 50,000 Toyota Corollas chugging around our roads during that December period.

‘It is unsatisfactory and long-suffering energy consumers deserve better,’ ended Mr Peters.

 

winston.peters@parliament.govt.nz

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