ACT has promised to block any break-up of New Zealand’s big power companies and to let households sell the electricity from their solar panels to whoever pays the best price, setting up a clear clash with New Zealand First ahead of the election.
Energy and resources spokesperson Simon Court released the party’s electricity policy at Parliament on Friday 18 September. He told RNZ that splitting up the so-called gentailers, the companies that both generate power and sell it to households, would not add any new generation, gas or transmission lines but would “shatter the confidence of anyone seeking to invest in growing capacity”.
“Nobody should be threatening to mess with that,” Court told RNZ. “The system that we’ve got works, but we do need some tweaks around the margins.”
New Zealand First leader Winston Peters announced in March that his party would campaign on separating the big generators from their retail arms as part of a wider overhaul of the sector. The Greens have a member’s bill from MP Scott Willis that would also split generation from retail, while Labour has said it is open to fundamental change but has not yet released a policy, interest.co.nz reported. National has said it will not campaign on a break-up because of the uncertainty it would create for investors.
Asked how likely it was that the gentailers would be broken up, Court told reporters “If ACT has anything to do with it, not at all.”
The three-page policy document argues that recent price spikes come from a shortage of supply, including falling gas availability and too little firm generation in dry years, rather than from a lack of competition. It says independent analysis commissioned by the Government found no competition problem serious enough to require the break-up. “ACT will not restructure an industry simply because political pressure demands somebody be blamed,” the document says.
Instead the party is targeting the lines companies that carry power from the national grid to homes and businesses. The document notes there are 29 electricity distribution businesses in New Zealand, each effectively a local monopoly because customers can switch retailers but cannot choose who delivers power to their property. Their charges make up around a quarter of the average household power bill, and together they are forecasting more than $32 billion of capital and operating spending over the next decade.
ACT would require lines companies and Transpower to show that cheaper options such as batteries, demand response and flexible connections had been properly tested before they could recover the cost of big network upgrades from consumers. Court said there was a risk New Zealand could “significantly overinvest” in lines, poles and local networks when batteries and demand management could avoid “enormous sunk costs that consumers will be lumped with for decades”.
The most direct change for households is on solar. At present a home that exports surplus power generally sells it through the same retailer it buys power from. ACT would let households use different companies for the power they buy and the power they sell, and would allow direct sales to neighbours, businesses and community energy schemes, subject to metering and consumer protections. Where a lines company restricts how much power a home can export, it would have to show there is a genuine network constraint.
“You should be able to get the best price for that electricity from whoever you want to sell it to, whether it’s a community network, whether it’s a local school or a business down the road,” Court told RNZ.
The policy would also create a pathway for private investors to finance, build, own and operate new transmission lines connected to the national grid, recovering their costs from the generators and users of the line rather than from every power bill. At the moment Transpower is the default builder even when others are willing to pay.
Court used Northland as his example. “Think of Northland, it’s got the potential to generate two to three times as much electricity from solar as Northland needs but they’ve got one skinny… rather unreliable connection to the grid,” he said. “If some Northland consortiums want to get together and fund their own grid connection so they can export solar power to Auckland, they should be enabled to do that.”
Customers paying for a new connection, extension or upgrade would be able to put the work out to tender among accredited contractors instead of being tied to their local lines company. “Private property developers tell me that for too long they have to wait for their local lines company to turn up. Often the prices are exorbitant, and they feel like they’re being held hostage or shaken down,” Court said.
Lines companies would still be responsible for safety. RNZ noted that in 2024 a pylon in Northland collapsed after subcontractors removed the nuts from three of its four legs. Court compared his plan with road maintenance, where contractors must meet standards and have safety plans approved by the network operator.
Some changes would need amendments to the Electricity Act and further policy work, and the Commerce Commission would gain oversight of transmission. Court said the package would be a priority for ACT. “Some of this involves tweaks to regulations. That’s not like a major reform,” he told reporters, according to interest.co.nz.
Court said energy affordability was top of mind for New Zealanders, and the question of whether to split the gentailers now divides the parties most likely to form the next government. National and ACT oppose a break-up, while New Zealand First, a current coalition partner, is campaigning for one. How that is settled after the election could decide the shape of the electricity market for years. You can track wholesale prices, lake levels and generation on our New Zealand electricity dashboard, and if you are still weighing up the parties, try our voting tool to see which one best matches your views.
Should the big power companies be broken up, or would ACT’s competition approach bring bills down faster? Would you sell your solar power to a neighbour or a local school if you could? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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