New Zealand Regulator Imposes New Rules on Top Energy Companies to Boost Competition in Electricity Sector
New Zealand's Electricity Authority on Tuesday imposed non-discrimination obligations on the country's four largest energy companies in a bid to level the playing field for hedging contracts in the electricity sector.Under the new rules, which are effective from July 1, Contact Energy (NZE:CEN, ASX:CEN), Genesis Energy (NZE:GNE, ASX:GNE), Mercury (NZE:MCY, ASX:MCY), and Meridian Energy (NZE:MEL, ASX:MEZ) will be required to provide risk management contracts to all buyers on an even-handed basis. This will prevent the companies from favoring their own retail divisions on price or non-price terms.The four power generation-retailer, or gentailer, firms will need to furnish compliance plans to the Authority each year, and also submit six-monthly assessments justifying their retail price offers relative to their expected cost of electricity supply.Electricity Authority Acting Chair Erik Westergaard said the new rules will boost competition, enhance transparency, and can be implemented quickly without a material cost increase for gentailers.Shares of all four companies rose less than 1% in recent Tuesday trade on the New Zealand bourse.