Turning a talk-fest into action: what next for Auckland
Auckland Business Chamber chief executive Simon Bridges speaks with Kathryn following an event this morning to discuss a strategy for the supercity. It comes 15 years since local councils amalgamated, with the promise of increased efficiencies and lower costs for ratepayers. But a recent survey shows residents aren't convinced the model has delivered.
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NZ Herald
3 minutes ago
- NZ Herald
Why our biggest power companies should be broken up (and why they shouldn't) - Power to the People, part 4
Known as gentailers because they both generate electricity and sell it as retailers, the big four have come under increasing attack from their critics as rising power prices squeeze households and businesses alike. These days Bridges is leading the charge. 'Gentailers come up with all manner of clever explanations from high-paying executives about all of this,' the chief executive of the Auckland Business Chamber and former National Party leader told the Herald. 'But as we lurch from crisis to crisis, they are ruling the roost more than ever.' The chamber was a co-signatory of an open letter to the Prime Minister this month calling for market reform. It's the latest in a growing list of public complaints by influential business leaders, politicians, and other campaigners, who say the electricity market is not working for people. Households are now feeling the pain along with businesses, as higher transmission charges drive a 10.4% increase in power bills. Consumer NZ's most recent quarterly sentiment survey in April showed 35% of people ranked the cost of energy as a top-three financial concern, up from 21% last April. The same survey found one in five households have had difficulty paying their power bill in the last year. Many prominent critics, including several smaller retailers, claim the prices are high because our four biggest companies control both the generation and the sale of electricity. Most have suggested breaking up the gentailers as the way to fix it. 'A cynical tactic' - the case for change Under the current system, the gentailers sell the electricity they generate to their retail arms at an Internal Transfer Price (ITP) before the remaining electricity is sold to retailers for spot (floating) or hedged (pre-agreed) prices. In 2022, Flick - which has recently been bought by Meridian - started a petition to split up the gentailers, saying the Internal Transfer Prices gentailers set for their retail divisions were artificially lower because they 'don't include the same costs and risks an independent retailer faces'. Flick said at the time: 'Essentially, gentailers are leveraging their vertically-integrated position to benefit from low electricity prices acquired through inherited assets.' Simon Bridges, CEO of the Auckland Regional Chamber of Commerce, a co-signatory of an open letter to the Prime Minister this month calling for electricity market reform. Photo / Dean Purcell The open letter that Bridges signed to Prime Minister Christopher Luxon suggested a range of reforms, which could include splitting the gentailers into separate generation and retail companies. 'When a handful of companies control both generation and retail supply, the competitive pressures that should attract new investors and drive innovation, efficiency, and fair pricing are severely diminished,' said the letter, which was also signed by the Employers' and Manufacturers' Association, the Northern Infrastructure Forum, Consumer NZ and four other independent power companies, Pulse Energy Alliance, Octopus Energy, 2degrees and Electric Kiwi. When advocacy group Common Grace Aotearoa asked every power provider what initiatives they were taking to curb energy hardship, most pointed to their philanthropic donations and support programmes. Two companies, though, said the issue went beyond each provider, and only market reform would get to the root of high prices. Switch Utilities, owned by 2degrees, said: 'We believe that the real issue is wider than those in immediate hardship. All Kiwis are paying too much for power, and we are strongly championing reform to the electricity market which will deliver greater competition and more affordable electricity.' Electric Kiwi said gentailers' dominance was keeping wholesale power prices artificially high. 'Weʼve long said that the root cause of high-power prices, a key driver energy hardship, is the structure of New Zealandʼs electricity market. 'The dominance of the big gentailers allows wholesale prices to remain artificially high. Itʼs a cynical tactic that is harming New Zealand. We are trying to change that.' While the smaller power companies have an obvious commercial motive in attacking gentailers' dominance, many other politicians and business groups have taken a similar stance. The EA says evidence that gentailers are using market power 'is not well defined, [but] industry consultation has not yielded any evidence to contradict our view that the status quo may be stifling competition'. A review of new regulations by NZIER for the Major Electricity Users Group said gentailers appeared to 'actively take advantage of the additional flexibility from vertical integration to smooth the allocation of wholesale price and volume volatility to their in-house retail divisions'. 'The ITPs for gentailers are estimated to be around $130 to $145 per MWh (megawatt hour, for the year ended 30 June 2024) compared with a wholesale spot price for the year ended 30 June 2024 of about $186 per MWh, and for the 10 months to 30 April 2025 is estimated at $215 per MWh,' it said. Political commentator Shane Te Pou claimed in a Herald column the four gentailers had protected their profits by holding back renewables generation and consents for new generators for years. 'The electricity shortage works for the gentailers,' he said. 'When there's not enough renewable generation, they can run their expensive gas and coal plants. The way the electricity market works is everyone gets paid the price of generating the most expensive unit of electricity. 'So, the best situation for gentailers is most of their power comes cheap as chips, through hydro dams that the taxpayer paid for decades ago and wind farms, but they get paid like it's all coming from gas peaker plants. 'It's this set-up that's allowed the generators to make $7.6 billion in profits over the past decade, according to Council of Trade Unions analysis, and pay out over $10b in dividends.' NZ First MP Shane Jones in Parliament. Photo / Mark Mitchell Current politicians have also weighed in. Associate Energy Minister Shane Jones has called the gentailers 'the most powerful economic institutions in New Zealand beyond the supermarkets and the Aussie banks'. Last August he told RNZ gentailers were not acting 'in a way that enhances competitiveness'. The Green Party's energy spokesman Scott Willis has a member's bill titled the Electricity Industry (Separation of Generation and Retail Businesses) Amendment Bill written last year. And the Organisation for Economic Co-operation and Development (OECD) commissioned a report that said the EA's reviews 'should reexamine separating the generation and retail operations of large electricity companies to boost competition in the futures market and provide industry with more hedging options'. A public poll earlier this year, commissioned by Octopus Energy and conducted by Curia, found 49% of people supported splitting up the gentailers, compared to 16% who did not agree. The remainder, 35% were unsure. The halfway house - a same-price deal As the controversy rages, a Government task force has come up with a compromise proposal to force gentailers to offer the same electricity prices and hedge contracts to independent retailers as they do to their own retail divisions. The Energy Competition Task Force was created by the Commerce Commission and the Electricity Authority (EA), two independent Crown entities, in response to surging wholesale power prices in August last year. The price spiked due to low gas supplies, record-low hydro lakes and a shortage of wind and sunshine. The EA says its proposed regulation would give New Zealanders more competition, more choices and lower power prices. 'We consulted on a proposal to introduce a new electricity industry rule called 'mandatory non-discrimination obligations' that the four large gentailers - Genesis, Contact, Meridian and Mercury – would have to follow," the EA said. 'This new rule would prevent the gentailers from giving preferential treatment to their retail arms for hedge contracts. Instead, they would have to make these contracts available to all industry participants on effectively the same terms as they use when trading internally.' The EA proposed the mandatory non-discrimination obligations as part of its Level Playing Field Measures, which the EA said would 'give all participants equal access to electricity hedge contracts, to increase competition and ultimately give consumers more choices and lower power prices'. The task force is considering feedback to its proposals, and a decision is due in August. Bridges told the Herald he did not necessarily believe the gentailers had to be broken up and remained open to any reform which created a clear delineation between divisions of one company. 'It may be a functional Chinese wall situation, right? Where one part of the business doesn't help the other.' He added he was not necessarily pointing a finger at gentailers. 'They are doing what rational players would do.' 'A chilling effect' - the case against The chief executive of the organisation representing generators and retailers said the EA's Level Playing Field Measures, as proposed, would not bring down power prices. 'Retailers believe the most effective way to reduce electricity prices and address energy hardship is by tackling the underlying causes of rising costs, such as constrained supply, infrastructure investment, and high input costs,' said Bridget Abernethy, chief executive of the Electricity Retailers' and Generators' Association of New Zealand (Erganz). Bridget Abernethy is the chief executive of the Electricity Retailers' and Generators' Association of New Zealand (Erganz). Erganz claimed in its submission that the EA's same-price proposal could increase power prices by 25% - a claim Abernethy said was backed up by a report it had commissioned. 'In 2021, Erganz engaged Dr Richard Meade of Cognitus Economic Insight to review the economic literature on the pros and cons of separating the generation and retail arms of the large generator-retailers. 'Dr Meade's report informed the Erganz submission [on Level Playing Field Measures] and our view that the proposed changes will not lead to better outcomes for New Zealand electricity consumers.' Abernethy rejected calls to split up the gentailers, pointing to the cost involved and the ability of large gentailers to manage volatility and risk. 'This [status-quo] structure has contributed to lower retail prices than would likely result under a separated model,' Abernethy told the Herald. 'Separation would be costly, take years to achieve, and introduce a chilling effect on investment that would slow our journey to a more renewable future. 'Most importantly, it would not address the underlying issues for consumers in hardship and would introduce inefficiencies that would likely result in worse consumer outcomes in the long term.' Abernethy claimed New Zealand already had one of the most competitive electricity markets in the world, with more retailers per capita than the UK or Australia. She also said the generation and retail gross profit margins, as a percentage of sales, had tracked below the all-industries average over the last decade and a half. EA figures showed gentailers' profit margins per megawatt-hour in 2024 had been lower than the smaller companies' margins. And Abernethy hit back at suggestions generators had not invested in new generation. 'Erganz members have spent around $10 billion on energy generation in the past decade, and more than $6 billion will be invested in renewable energy generation between now and 2030. '[And] three of the four large retailers return more than half of their profit to the Government (as a 51% shareholder) for the benefit of all New Zealanders.' Winstone Pulp International's Karioi Pulpmill is was shut down last year. Photo / Alexa Cook, RNZ Bridges hit back with a pointed reference to the series of large business shutdowns driven by soaring energy costs - especially Oji Fibre Solutions closing its paper mill in Penrose, Auckland, and Winstone Pulp International closing two mills in the Ruapehu district. 'The fundamental pushback (from the industry) is that it'll have a chilling effect on the marketplace. My response to that is; well, what about the chilling effect of the wholesale deindustrialisation of New Zealand that's going on right now - not all because of power, but with that being a significant part about it? What about the businesses that are going bust?' Monday: As Kiwis battle rising electricity bills, campaigners call for change Tuesday: Could you get a cheaper plan for electricity? Most companies won't tell Wednesday: Major company moves to stop disconnecting customers in hardship Thursday: Why our biggest power companies should be broken up (and why they shouldn't)
RNZ News
3 minutes ago
- RNZ News
Debt collectors harassing borrowers at their homes and workplaces, charity warns
Photo: 123RF An organisation representing financial mentors warns unethical debt collectors are harassing people to pay-off loans at their workplaces, homes and on social media. FinCap charity has released its annual Voices report after collecting data from more than 700 financial mentors. Its chief executive Fleur Howard said some debt collectors are deliberately panicking debtors and stricter rules are needed. "Financial mentors tell us they are working with people who are being harassed and coerced by debt collectors at work, at home, and on social media. This can endanger people's employment and embarrass them in front of their communities," she said. "These tactics force people to agree to repay debts they may not be legally responsible for, and repayment plans they can't afford. This can send people into a spiral of missed repayments, and see small initial debts balloon in size." The report shows half of those seeking help from a financial mentor are in work, while one in ten have a mortgage. Financial mentors have seen an 88 percent increase in waged or salaried clients earning over $1000 per week since 2021. The report states that many households have taken on debt to pay bills and keep food on the table, and a large burden of accumulated household debt has been building, much of which has become unmanageable. It said some debt collectors were also using coercion or illegitimate threats of legal action and turning up at people's workpaces, homes and sending excessive automated texts and emails. "This isn't about getting people out of debts that they legitimately owe," Howard said. "Some debts arise that should never have been issued under today's responsible lending rules. Sometimes, they are debts owed by a relative, which people are pressured into taking responsibility for, or there is actually no legitimate debt at all." Howard said many households were struggling with the burden of accumulated and unmanageable debt. "There are debt collection agencies who act responsibly, but the lax legal framework creates a wild west situation, where some unscrupulous debt collectors act unethically. " The Fair Trading Act governs all private debt collection and in May, Commerce and Consumer Affairs Minister Scott Simpson said he would review the Act later this year with a responsibility to "safeguard the interests of consumers and ensure that their rights are fairly upheld". Howard said that planned review, alongisde the Financial Services Reforms Bills currently before Parliament were important opportunities to fix the law around debt collection. "Debt collection reform will enable people to repay money they legitimately owe, without being subject to harassment and bullying," she said. David Verry from North Harbour Budgeting Services said the report echoed what financial mentors saw on a daily basis. He said when people believe that they're going to be talked about in social media, or somebody was turning up to their work premises they may feel forced to make some sort of payment that they may not be able to afford. "They'll feel forced into making some form of payment towards it before they make payments on other things, things like food or petrol for the car," he said. "When people turn up to people's places and they're in sort of pseudo uniforms that can be very intimidating for clients." Verry said currently there was no industry body that people could go to and complain about the actions of the debt collectors. "It's essentially an industry which is just completely unregulated, and what we would like to see is some boundaries put in place there," he said. "We'd like them brought into the Fair Trading Act. We'd like them to be licensed." Verry said financial mentors just want debt collectors to play the game fairly. FinCap is proposing three key recommendations for debt collection conduct rules: Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Techday NZ
11 hours ago
- Techday NZ
Atturra rebrands Plan B to expand IT services in New Zealand
Atturra has confirmed that Auckland-based Plan B Limited will rebrand as Atturra, following its recent acquisition by the advisory and technology services business. The rebranding will take effect from 31 July 2025, marking the integration of Plan B's nationwide network of five data centres and its portfolio of over 1,000 clients into Atturra's operations. Atturra's expansion in New Zealand brings five business divisions to the market: Managed Services, Cloud Services, Business Applications, Data and Integration, and Advisory and Consulting. The move aligns with Atturra's commitment to delivering a broad IT solutions portfolio across Australia and New Zealand, further strengthened by the recent acquisition of ComActivity, which provides Infor M3 ERP services. Expanded services As part of its local service expansion, Atturra is introducing several new offerings for New Zealand clients. These include enhanced end user support focused on "modern workplace/helpdesk" services, aiming to improve staff productivity through desktop and workplace technology solutions. The enhanced security suite will offer cybersecurity services designed to safeguard organisations' data and infrastructure, leveraging Atturra's skills in managed security, threat prevention, and compliance with regulatory requirements. Public cloud services, including expertise with major cloud platforms such as Microsoft Azure and AWS, will also be available. These services cover the architecture, deployment, and management of cloud solutions, supported by Atturra's managed cloud services team. Additionally, a procurement service will enable streamlined access to hardware and software through Atturra's supplier network, offering end-to-end provisioning for IT equipment and software licensing. Leadership appointments Atturra has announced several senior leadership appointments alongside the rebrand. Frazer Scott has been named Country Manager for New Zealand and will also support Atturra's ANZ network strategy. His remit includes aligning the company's go-to-market efforts in New Zealand and leading the managed services division locally. The company's regional leadership team, predominantly based in Auckland, has also been drawn from existing Plan B talent. The team includes Diego Nievas as Chief Technology Officer, leading technical strategy and innovation for managed services across Australia and New Zealand; Sachin Jain as Director, Customer Experience, overseeing delivery and client success; and Rudi Hefer as Director, Commercial and Connect, responsible for the ANZ networking, connectivity business, and commercial and channel activities. "Our enhanced service portfolio will allow Atturra to deliver more comprehensive, integrated solutions - from infrastructure to cloud and user support - tailored to New Zealand organisations. Frazer Scott commented further on the transition, stating, "While existing clients will see no immediate changes to the services they receive and will continue working with the same local team, work is underway to combine Plan B's infrastructure and local expertise with Atturra's broader solutions and resources. Shared planning, cross-training, and alignment workshops will help teams operate as one. Clients can expect improved innovation and delivery as a result." The leadership restructuring aims to reinforce Atturra's commitment to managed services, local leadership, and collaboration across regions. The company intends for existing Plan B clients to benefit from a seamless transition with continued support from the local team, while accessing a broader suite of services under Atturra's brand. Atturra's clients span a wide range of industries including government, utilities, education, defence, financial services, and manufacturing. Its partnerships with global technology providers such as Boomi, Cisco, HP, HPE, Infor, Microsoft, Nuix, OpenText, QAD, Smartsheet, Snowflake, and Software AG underpin the company's service offerings. The rebrand and leadership appointments underscore Atturra's strategy to deliver expanded IT services to organisations in New Zealand while integrating Plan B's local experience and resources into its broader operational framework.
