Key findings

• Power prices have outpaced inflation – Since the Bradford reforms in 1999, household electricity costs have risen by around 177%, at nearly twice the rate of inflation.
• Households are cutting back to cope – Our research found 41% of people were going without heating to save money, while 21% went to bed early to reduce energy use.
• Energy is a top financial concern – More than half of New Zealanders are worried about rising power bills, making energy the second biggest financial concern after food.
• Disconnections are leaving households without power – More than 30,000 households had their power cut at least once during the last financial year because they couldn’t pay their bills.
• Prepay customers are hit hardest – In 2025, there were 317,031 prepay disconnections, with some households disconnected up to 11 times in a single month.

Four factors driving high power bills

• Four big power companies dominate the electricity market – Contact, Genesis, Mercury and Meridian control around 85% of the retail market. These companies both generate and retail electricity, giving them competitive advantages smaller retailers don’t have.
• Power prices don’t reflect real costs – The spot market means expensive fossil-fuel generation can set the price paid for cheaper renewable electricity.
• New Zealand hasn’t invested enough in homegrown energy – Over the past 25 years, the country's generation capacity has increased by just 15%, leaving us too reliant on expensive coal and gas when renewable supply is low.
• Party politics have got in the way of a long-term plan – New Zealand lacks a durable, cross-party energy strategy to guide investment, improve affordability and support the transition to renewable power.

Recommendations

• End the dominance of the big four power companies – Separate power generation from retail, so smaller power companies can compete, which should lead to lower prices and more choice for consumers.
• Make power prices reflect real costs – Sort out the market so we stop paying high fossil fuel prices for cheaper renewable energy.  
• Invest in more homegrown energy – Build more renewable generation and dry-year backup capacity, so New Zealand relies less on expensive coal and gas.
• Use government buying power to unlock investment – Leverage long-term deals with large public energy users, such as hospitals, to help new generation projects get off the ground.
• Investigate a firming market – Explore whether New Zealand needs a separate market for dry-year backup power, as recommended by the OECD, to encourage more independent generation.
• Make household solar part of the system – Support more homes to install solar and explore how household-generated power can be shared locally and fed into the grid.
• Set a long-term national energy plan – Develop a cross-party strategy with clear 10-, 20- and 30-year targets for energy affordability, security and emissions.

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