Power bills have risen about 20% in just two years, while the big four electricity generating retailers have posted record profits. Against that backdrop, some commentators have dubbed this year’s contest the “energy election”. In March we found more than 50% of New Zealanders said energy policy would influence their vote – and that was before winter brought colder temperatures and higher power bills.
As the political parties have kicked into electioneering mode they have all acknowledged that the status quo is not working, and they all have different ideas about how to fix the system. The question for households is how much these proposals would reduce power bills, and how quickly any benefits would reach them.
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ACT
ACT identifies regulation as a barrier to new electricity generation, technological innovation and increased competition in the electricity market. Its approach centres on reducing those barriers.
The party says it will strengthen enforcement against companies that misuse market power to prevent consumers accessing better deals.
For households that generate their own power, ACT proposes allowing surplus electricity to be sold to whichever buyer offers the best deal, rather than being restricted to the household’s existing retailer.
ACT favours continuing a market-based approach, with an emphasis on competition, investment and enforcement against misuse of market power. The party says it “won’t tear up the industry just to find a scapegoat.”
Green Party
The Greens propose creating Kiwipower, a publicly owned energy company intended to deliver affordable, secure, renewable power. For households, the party proposes zero-interest loans for solar panels and batteries. National also proposes loans for these technologies, but at a low interest rate rather than zero interest.
The Green Party supports separating electricity generation from retail, arguing that the gentailers have too much market power. It opposes a liquefied natural gas (LNG) import facility because of its cost and reliance on fossil fuels.
Labour
Labour’s SolarSaver policy would provide subsidies of up to $3,000 for eligible households, including enabling renters to use plug-in solar. Like some other parties, Labour wants to encourage solar uptake, with proposals aimed at renters as well as homeowners.
The party recently said in the media it would begin considering structural reforms of the electricity market within 100 days of forming a government. Although Labour has not set out a detailed plan ahead of the election, energy spokesperson Megan Woods says a Labour government would consider pooling the country’s coal and gas generation assets into a new business.
When it comes to dealing with the dominance of the gentailers, Woods said Labour is willing to look at a split, but needs to be convinced that doing so would actually bring power prices down.
Labour is critical of National’s LNG stance, instead favouring greater reliance on renewable energy.
National
National describes a liquefied natural gas (LNG) import facility as a critical step to strengthen energy security. It argues the facility would provide a backup energy source when hydro lake levels are low and reduce the extra cost associated with the risk of low rainfall, known as the dry-year price premium.
National has also proposed a Home Energy Fund: a low-interest long-term loan to enable household investment in solar, batteries and insulation. The party also states in its 100 day plan that, if re-elected, “it would progress work to finalise new safety rules for new solar, so Kiwis can generate their own cheap power.”
New Zealand First
New Zealand First wants to split electricity generation from retail and develop a national energy strategy. To get more renewable power built, it proposes long-term, fixed-price contracts for new projects and priority use of the power they produce. For households with solar, it wants surplus power sold back to the grid at the same price households pay to buy it.
The party also calls for a national energy strategy to support renewable generation — a measure Consumer NZ has advocated — alongside developing New Zealand’s oil and natural gas resources.
Opportunity
Opportunity favours changing market rules and giving regulators more powers and resources rather than breaking up electricity companies. It proposes a cross-party agreement targeting 30GW of total generation capacity by 2050, supported by a capacity investment scheme modelled on Australia’s approach.
The party also proposes consolidating energy regulators and distributors to keep profits in check, as well as low-interest loans to support a shift to electricity.
Te Pāti Māori
Te Pāti Māori prioritises reducing reliance on fossil fuels and overseas energy supplies, including LNG, while promoting New Zealand ownership of energy resources and stronger climate protection. Its policies link these aims to energy sovereignty and better consumer outcomes. The party has criticised the current government’s response to problems in the energy sector.
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What happens next for power bills?
This winter Consumer NZ launched a four-point plan to bring down power bills. More than 82,000 people signed our petition calling for government action to fix the sector – more than any other Consumer petition.
Our plan called for four things to happen to reduce power prices:
End the dominance of the big four power companies: ensure separation of generation (making power) and retail (selling power) so smaller power companies can compete, which should lead to lower prices and more choice for consumers.
Make power prices reflect real costs: sort out the market so we stop paying high fossil fuel prices for cheaper renewable energy.
Invest in more homegrown energy: so we have enough power in years with less rainfall, and reduce our reliance on expensive coal and gas.
Set a long-term plan together: develop a cross-party energy strategy to put affordable power ahead of politics and vested interests.
While some key players in the sector report record earnings, many households are struggling with high electricity prices.
The response to our petition gives Consumer a clear mandate to continue pressing for action on electricity affordability, regardless of which parties form the next government.
Party policies have been presented in alphabetical order. The term ‘gentailers’ refers to companies that both generate electricity and sell it to customers.
