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Retail Market

Most consumers buy their power from an electricity retailer, rather than in the wholesale market. Retailers buy electricity at the connection point to the grid and on-sell it to consumers at individual customer connection points.

In most cases, the retailer manages transmission and/or distribution services to the customer's premises and is responsible for the installation of appropriate metering, meter reading, billing and payment collection. The retailer pays distribution companies for distribution service (which includes transmission charges paid by distributors to Transpower), and also buys electricity from the wholesale electricity market. In most cases, the consumer receives one bill from the retailer with all these charges included together.

The Electricity Authority oversees the operation of the electricity retail market in order to promote retail competition and fairness for consumers. The role includes providing arrangements for protection of consumers, as well as for administering Electricity Industry Participation Code (the 'Code') such as metering arrangements, customer switching and reconciliation - the process by which the quantity of electricity purchased by each retailer is calculated.

Customers can switch between retailers. Any party can be an electricity retailer provided they meet the minimum requirements specified in the 'Code'.  While the extent of retail competition varies across the country, customers have a choice of retailers. In some parts of New Zealand there are five or more competing retailers.  The switching process has become easier over time, and can generally now be done over the phone with the new electricity retailer.

All the major generation companies in New Zealand are also electricity retailers: Contact Energy, Genesis Energy, Mercury Energy (a subsidiary of Mighty River Power), Meridian Energy and TrustPower. In addition, there are a number of smaller independent electricity retail companies.