Contact Energy says government intervention will not help to build more power stations in the country. Photo: RNZ / Nate McKinnon
Contact Energy says government intervention will not help to build more power stations in the country.
Last week, Associate Energy Minister Shane Jones said the country's 'big four' electricity generator retailers (gentailers) were profiteering and the government needed to intervene.
Wholesale power prices have doubled in the past three weeks, forcing some big users to temporarily close down and at least one electricity retailer to stop taking on new customers.
Contact Energy CEO Mike Fuge said his company was "absolutely not" profiteering.
"We can say with some confidence that any additional profits we've made in the last four years have gone straight back into renewable energy, building renewable energy, power stations," he told Morning Report on Monday.
"And we've got a lot on the go at the moment in terms of building, and that investment will pay dividends very shortly."
Contact Energy on government intervention in energy sector
He said profits had risen, but only "in line or slightly ahead" of inflation, and they "haven't necessarily gone back to shareholders - they've gone back into investment in renewable energy".
"You've got to also remember that, , that return on investment is in the order of about 3.5 percent. So it's a very low return on investment."
He said Contact welcomed the Electricity Authority's probe into energy companies' profitability and reinvestment.
"Remember, ordinary Kiwis aren't being affected by these wholesale prices at the moment - but what's important is they do have a close look at the market. That is their role and we welcome them having a look at it.
"As for Shane, Look, it's retail politics. That doesn't build power stations, and that's what we're getting on and doing at the moment."
Energy Minister Simeon Brown has called for the Electricity Authority to publicly report power data to ensure there was no price-gouging in the sector.
Wholesale prices are up partly because levels in the country's storage lakes are low. Prices at the retail end for households have not spiked as much because of long-term deals which flatten prices out, but there have been warnings they too will rise eventually.
Fuge talked up Contact's investments in new generation, including Tuahara and Te Huka 3, a battery at Glenville Power Station and replacing Wairakei Power Station.
"We are investing, and that is where we see the return. We want to be very much leading the decarbonisation of New Zealand's economy. What we've got at the moment is a transition. It's going to be a bit bumpy, but the important thing is we get on and build these power stations, and that's where our focus is 100 percent."