Is bigger better? Mergers in electricity distribution A new paper published recently in New Zealand Economic Papers by ex-TDBer Dr. Tom Stannard (now at Otago University’s Accountancy and Finance Faculty) and TDB Director Phil Barry explores the case for economies of scale from mergers in the electricity [...]
Market Power The Commerce Amendment Act 2022 has changed the rules of the game when it comes to the misuse of market power in the New Zealand economy. From April 2023, firms with substantial market power may not act in a way that substantially lessens competition in [...]
Electricity prices – to mandate or not to mandate The Electricity Authority in its recent consultation paper: Supporting reform to efficient distribution pricing: a refreshed Distribution Pricing Practice Note discusses reform of distribution prices as a priority for the Authority. A key issue that arises is: should [...]
Tiwai Point smelter closure Following the announcement by New Zealand Aluminium Smelters that the Tiwai Point smelter would close in August 2021, there were major adjustments in financial markets. The share prices of the five major gentailers decreased by between 3% and 14% and wholesale electricity futures [...]
The Mixed Ownership Model Between 2011 and 2014, the government sold down its ownership in Meridian, Mercury and Genesis Energy and listed 49 percent of each company’s shares under the “mixed-ownership model” (MoM). In a recent report, TDB reviewed the performance of these three MoM companies since [...]
Gas Governance Review The gas sector is currently co-regulated by the Government and industry-owned Gas Industry Company (GIC). This co-regulation has been the case since 2004, though major gas outages last year have raised the question, do we need to rethink this governance model? In our recent [...]
Productivity in the electricity lines sector One of the biggest challenges the New Zealand economy faces is how to boost its productivity. By increasing the output that is produced with a given amount of resources, increased productivity means we can all be better off. We were surprised, [...]
Are there too many electricity distributors? A long-standing debate in the New Zealand electricity sector is whether the country has too many electricity distribution businesses (EDBs). In our recent report looking at the potential benefits from amalgamation of the current 29 EDBs, we found that amalgamation is [...]
Commerce Commission price reviews The Commerce Commission has recently accepted applications from Wellington Electricity and Powerco to go on customised price-quality paths (CPPs), allowing new revenue limits to be set for these electricity distribution businesses. After processing the two applications, the Commission published an open letter seeking [...]