Energy Minister Simeon Brown Photo: RNZ / Angus Dreaver
The government has asked the Electricity Authority to publicly report power data to ensure there is no price gouging in the sector.
Speaking to Morning Report, associate energy minister Shane Jones accused the power companies of profiteering after wholesale power prices doubled in the past three weeks.
The spiking power prices were partly due to much lower than usual hydro lakes storage. It has led several big businesses to warn their viability was being put at risk, with two timber mills considering closing.
Jones said there were also "significant deficiencies" in the market, and accused the power companies of price gouging.
"Of course they're profiteering," he said.
Associate energy minister Shane Jones Photo: RNZ / Samuel Rillstone
He suggested the government could impose a code of conduct on power companies, and criticised the Electricity Authority regulator as ineffective, calling it a "chocolate teapot".
Prime Minister Christopher Luxon was asked whether the power companies were indeed profiteering.
"Ah, again, Simeon Brown called those energy companies in yesterday and had a good chat to them about what we expect in competition. But again this is a supply problem that has happened, because New Zealand - when the lakes aren't full enough, when the wind doesn't blow strong enough, when the sun's not strong enough - is going to rely on gas for several decades to come," he said.
He was asked if that was a difference of opinion with Jones.
"No, no, I think Shane Jones is on the right track," he said. "I say there's been very expensive electricity prices if you look at last week."
Prime Minister Christopher Luxon Photo: RNZ / Reece Baker
Luxon said New Zealand had major challenges with energy, but it was "thanks to the previous government" and its oil and gas exploration ban.
"You can go out there with bumper stickers as we saw, but now we are dealing with the consequences, we have a major shortage in gas which is a critical part of our energy system, and now we need to import huge amounts of Indonesian coal in order to keep the lights on."
He said gas would need to be rationed, which would be managed through a supplier group set up two months ago.
"That is a short-term solution. The long-term solution is to make sure that we are doubling renewable electricity, and we need to find a long-term solution to gas as well.
"It is happening because we're in the peak of winter and we don't have enough gas supply and that is the core issue."
Energy Minister Simeon Brown confirmed he had been meeting with sector stakeholders, and had asked the Electricity Authority to regularly publish power data to ensure the power companies were not price gouging.
"I've asked them to be publicly releasing data on a regular basis to give New Zealanders confidence," he said.
Asked if the companies were profiteering, he said that was why he had asked the Electricity Authority and the Commerce Commission to look into the matter.
"EA and the Comm Comm are the appropriate agencies to ensure that those questions are being answered."
He was on the same page as Luxon about the cause of the problem.
"We have an energy shortage, that is ultimately what is driving this situation. We've got a dry year, we've got low wind and we have a lack of natural gas ... we have been very clear that will be looking at importation of LNG (liquid natural gas) as a solution in the short to medium term.
He evaded questions over whether the government should intervene in the market.
"What we're focused on here is ensuring that New Zealand has the energy that we need," he said, and, when questioned again: "I've told you the things that we are doing, and the things that we are getting advice on."
He also did not directly answer whether the government might bring in regulatory tools like a code of conduct, saying further advice was needed.
Labour energy spokesperson Megan Woods said the government had no vision towards fixing the long-term problem, after having "bowed to industry and ... cancelled the New Zealand battery project".
ACT's Simon Court said the party would not support the government intervening in the market to force the market price down.
"That's actually a very good indicator of scarcity," he said. "Gentailers are only responding to the market conditions and incentives that they have before them. They're also responding to the fact that there is much more demand for electricity than there is supply available.
ACT's Simon Court at a select committee. Photo: VNP / Phil Smith
"Last week, we've seen energy prices spiked to over $1700 a megawatt hour, there's a supply crunch coming - that's what that's telling us. It's going to affect Kiwis in their homes, power's going to become more unaffordable."
He said ACT's solution was to "support investment decision making by overseas and domestic investors - people who want to explore and develop our resources", and to seek a cross-party accord agreeing that natural gas needed to be part of New Zealand's future.
"We would say, look, let's focus on increasing supply, we're going to make changes to the Resource Management Act to make it easier to develop offshore wind... we are going to be changing the law so that will be promoting the use of Crown minerals.
"If other parties currently in opposition don't agree that natural gas is part of our future, New Zealand risks decades of energy scarcity, high prices, and essentially a deindustrialisation and the loss of valuable jobs."
The Green Party was not interested in joining such an accord, however.
"Investing in fossil fuels is never the solution here," spokesperson Ricardo Menéndez March said. "We need better investment in renewables and at the same time addressing things like poverty so that families can pay their bills."