Government shakes up New Zealand generators
New Zealand`s state-owned generator, ECNZ has been broken into three separate companies as part of the government`s move to introduce competition into the wholesale electricity market.
The three new companies are: Mighty River Power, with 13 per cent of the market; Genesis Power, with 17 per cent of the market and Meridian Energy with a 30 per cent market share. The other major generator with 27 per cent of the market is Contact Energy. Edison Mission Energy recently closed a deal to purchase a 60 per cent share in Contact for NZ$1200m ($635m).
Although the government has no plans to privatize any of the three generators at this time, it is expected that at least one will be sold next year.
Prior to the split on April 1, wholesale spot prices were about NZ$70/MWh. Since then prices have fallen to NZ$16/MWh as the companies compete for market share. This should help to reduce retail prices, which is the main objective of the reform process.