Electric Kiwi points finger at big power generators for driving up prices despite making record profits

A power company is pointing the finger at its bigger competitors for driving up prices despite making record profits. 

Electric Kiwi says four big companies are selling wholesale power at a steep price, which means we're having to pay more to keep the lights on.

It's no secret, our cost of living is high and power bills are part of that headache. 

"It went up," said one Kiwi Newshub spoke to.

"It's too expensive."

"It's a bit high but it's okay," said another. 

In a recent email to its customers, power company Electric Kiwi passed on the blame for rising rates, saying it's having to pay record prices for wholesale electricity. 

It pointed to the big four generators - Mercury, Meridian, Contact and Genesis - saying they've increased the cost of wholesale power, even though they've doubled their net profits in the last year from $788 million to more than $1.5 billion.

Those generators though say the hike in wholesale cost is because of the rising cost of thermal fuels like gas, coal or diesel and increasing carbon costs.

But veteran electricity analyst Molly Melhuish has called that "profit-seeking" behaviour and that our funding model is broken. 

"We'll charge everything as the highest price on the system which these days is usually coal-fired generation."

That means cheaper-to-produce power options like hydro or wind are priced the same as costlier generators, like coal. 

That's despite coal only making up roughly 7 percent of our electricity generation.

"In many other countries including in California, that model was modified so it wasn't so grossly profitable. In New Zealand it just happens," said Melhuish. 

Melhuish said there's little incentive to change. The Government owns 51 percent of three big power companies - Meridian, Genesis and Mercury and when they profit, so does the Government.

She believed the companies are revenue-gathering now to help pay for future infrastructure needs to cope with the influx of electric cars.

The Electricity Authority (EA) said it's looking into wholesale pricing to ensure the market is working in the best interests of consumers. 

But Melhuish said the sector needs an overhaul including the EA. 

"That means you'd have to have a real regulator, not just a fake regulator which the Electricity Authority is because it is governed by the very profit-seeking corporations that they're trying to regulate," said Melhuish. 

In response, the EA said it's an independent Crown Entity, governed by an independent board and leadership team.

But there is one thing you can do to help reduce your bills and it's as simple as a click of a mouse button online and compare providers on Powerswitch.

"What we found is consumers on average are saving $385 by changing their electricity providers," said Powerswitch's Paul Fuge. 

Annual savings could make a real difference, just one way to put a little bit of the power back in your hands.