A small central North Island power company appears to have fallen victim to high wholesale power prices.
File image. Photo: Paul Moss Photographer Artist NZ [CC BY-SA 2.5]
The Electricity Authority has told customers of ID Power they need to find a new power supplier from the end of next week.
"ID Power will stop trading on the wholesale electricity market because it failed to keep up with its wholesale market payments," the authority said in a statement.
"If you are a customer of ID Power we encourage you to switch to another retailer before 19 May 2021."
Any consumers who did not switch would be automatically transferred to another power company and then informed, but no customer would be disconnected, the authority said.
ID Power had been offering electricity based on wholesale rates, which have sky rocketed in recent months because of low hydro lake levels and disruption to gas supplies.
The authority said it had started its default trader procedures.
"The default process is designed to ensure customers are looked after, while maximising the opportunity for the trader to resolve the default. This in turn minimises the risk of reduced payments to generators."
However, it warned other power companies which might owe money to be prepared for possible losses.
"It is normal in a competitive market for companies to start up in the sector and to leave the sector. Businesses will enter and exit the market, as for any sector."