Power prices in New Zealand soar as the Prime Minister blames Labour's oil and gas ban. Photo: RNZ / Nate McKinnon
Big and small energy consumers are calling for an urgent reform of the sector as soaring power prices undermine confidence and productivity.
The group's open letter to Prime Minister Christopher Luxon said many consumers were struggling to keep the heat on this winter, while the wholesale costs for many businesses had more than doubled.
"Regional employers are shutting their doors, with hundreds of jobs and decades of investment lost," it said.
"Families and communities are being left behind."
The government had commissioned an independent high level review of the energy sector, but the group was looking for more than incremental changes.
The letter takes aim at the four big power generation companies Genesis, Contact, Mercury and Meridian, also referred to as gentailers, because they compete at the retail level.
"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," the letter said.
The letter was signed by groups representing big and small energy users, small retail energy suppliers, and a cross-section of industry organisations representing a broad range of sectors.
Consumer NZ chief executive Jon Duffy said the state of the energy sector was at odds with Luxon's economic vision.
"We're never going to grow the economy if people can't afford the inputs for growth," he said.
"What we are concerned about is a lot of people and an increasing number of people are being faced with pretty stark choices about whether they can heat their home or put food on the table. Those sort of tough decisions."
Duffy said energy consumers were on the same page when it came to the call for reform.
Among the key issues was the speed of development.
"Investment in new generation is being delayed, sustaining high prices, and contributing to the energy supply crisis we now face," the letter said.
"Our dysfunctional electricity market is holding back New Zealand's productivity, restricting our international competitiveness, and driving up the cost of living."
It said the government needed to undertake a comprehensive reform of the sector.
"The time for incremental adjustments has passed," it said.
"Level the playing field. Put protections in place for consumers and businesses alike.
"Unlock investment in low-cost, renewable generation. Put forward an energy strategy that all political parties can sign up to."
It said the reforms needed to address the immediate supply challenges as well as the underlying structural problems that created them.
"We're running out of gas, and new electricity generation just isn't being built at the rate we need."
The group wanted the Prime Minister to make the most of New Zealand's natural resources to create a secure, affordable, renewable electricity system.
Luxon told Morning Report's Corin Dann the crux of the problem came down to New Zealand not having enough gas after the former Labour government banned new oil and gas exploration.
"We need to have abundant, affordable energy to grow the economy. We need it to make sure Kiwi power bills are lower.
"We're repealing the oil and gas ban this quarter. We've got our fast-track regime to get doubling of renewables in place and we're replacing the RMA [Resource Management Act]..."
When asked if the government would break-up the gentailers Luxon said the single biggest issue was a supply problem because New Zealand didn't have access to gas "which we desperately need when we don't have enough wind, rain or sun".
"We are the only country I know of, Corin, in the whole world that is making the rather unique transition from domestic gas to imported coal.
"That is insane, because of an oil and gas ban from the Labour guys and so we are reversing that. That's the single biggest thing we can do."
The Prime Minister said gas had been powering mills, manufacturing plants and much of the country's heavy industry.
He said the government was doing everything it could to double renewable energy projects including consenting them faster under fast-track legislation.
Luxon said the government was "pulling all of those levers" to get electricity bills down.
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