Have your say: Should energy retailers pay consumers to conserve energy?

Energy retailers in New Zealand should be required to make payments to consumers in the event of a public energy conservation campaign or in cases of enforced power cuts, the Ministerial Electricity Market Review recommended today. The recommendation was one of a number of suggestions to improve the way energy retailers operate in New Zealand and reduce the vulnerabilities to 'dry years' after steep price rises over the last decade. The review also recommended that SOE energy assets be reshuffled in order to improve wholesale and retail competition and help restrain prices. It outlined three options for this suggestion:

Option One: Create a new SOE generator-retailer comprising the Huntly and Manapouri power stations, and, additionally, transfer Tekapo A and B to Genesis and Whirinaki to Meridian. Option Two: Transfer the Huntly power station to Solid Energy, the Manapouri station to Genesis and the Whirinaki station to Meridian. Option Three: Transfer the e3p and P40 power stations from Genesis to Meridian and the Manapouri power station from Meridian to Genesis.

• Require retailers to make payments to consumers in the event of a public conservation campaign or enforced power cuts, with a graduated scale reflecting the level of nationwide savings (as determined by the System Operator), and with a minimum payment of, say, $10 per week.
• Require SOEs to disclose their risk positions and other relevant information in the same way as private sector companies listed on the Stock Exchange, to improve the quality of information available on risk and sharpen risk management incentives.
• Allow lines companies to provide electricity retailing services in their local areas (subject to conditions)
• Ensure that guidelines and standards on smart meters provide for (or allow upgrades for) energy efficiency capability, open access communications, customer switching, and the development of smart networks.
• Encourage retailers to make tariffs available, as an option for consumers, that provide incentives to better manage electricity consumption including through shifting load to off-peak times and conservation during dry years.