Current Structure
As mentioned above, the New Zealand electricity market is split into the following areas: administration and market clearing, regulation, generation, transmission, distribution and retailing.
The current legislation (Electricity Industry Reform Act 1998) prevents the ownership of cross-sector investment (that is energy and lines functions). This means a generation company cannot own or have an interest in a distribution company and a distribution company cannot retail electricity or deal in electricity hedges. There are two exceptions to the regulations: generation companies can own the lines required to transport electricity from their power stations to the grid or local distribution network; and distribution companies can own a small amount of conventional generation capacity within their network but are not limited in the level of renewable generation capacity. There is no barrier to vertical integration from generation to retail. The overall arrangement of the industry creates some very interesting market behaviour amongst the players.
First of all, generation is dominated by five companies: Meridian Energy, Contact Energy, Genesis Power, Mighty River Power, and TrustPower.
Read more about this topic: New Zealand Electricity Market
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