Latest / Early Edition with Ryan Bridge / Lisa Hannifan: Meridian Energy Chief Customer Officer on the company buying Flick Electric's electricity customers and brand

Transcript

Lisa Hannifan: Meridian Energy Chief Customer Officer on the company buying Flick Electric's electricity customers and brand · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: The rumors were true. Is Z Energy's power company, Flick,
• 0:03
  Speaker 1: has bowed out of the market forty one thousand customers.
• 0:05
  Speaker 1: They're going to move to Meridian, who bought it for
• 0:07
  Speaker 1: seventy million. The market now dominated by the four major
• 0:10
  Speaker 1: gen tailors and the various brands under which they sell electricity.
• 0:13
  Speaker 1: Lisa Hannafan, the Meridian chief customer officer, with me this morning. Lisa,
• 0:17
  Speaker 1: good morning, Good morning Ryan. Is this going to mean
• 0:20
  Speaker 1: higher prices for the market now that it's more consolidated
• 0:23
  Speaker 1: and we have fewer retail options?
• 0:26
  Speaker 2: I don't think so. I think that New Zealand's actually
• 0:28
  Speaker 2: really well served with the amount of competitors we've got.
• 0:32
  Speaker 2: We've got more in New Zealand per capita than both
• 0:35
  Speaker 2: Australia and the UK, and we all compete pretty fiercely
• 0:38
  Speaker 2: out here.
• 0:39
  Speaker 1: But we've you've just consolidated. You're taking on what an
• 0:44
  Speaker 1: eighteen percent market share?
• 0:45
  Speaker 2: Is there?
• 0:46
  Speaker 1: What you've got?
• 0:48
  Speaker 2: That's right? Well, once we've acquired Flick, we'll have eighteen percent,
• 0:51
  Speaker 2: so that will leave us in our normal position, which
• 0:53
  Speaker 2: is the fourth largest electricity retailer.
• 0:56
  Speaker 1: And you don't think it's going to have any effect
• 0:58
  Speaker 1: on prices.
• 1:00
  Speaker 2: I don't think it is. No. No, I think that
• 1:03
  Speaker 2: we're all fighting for every customer that we get, and
• 1:06
  Speaker 2: we know that customers expect really good value for money,
• 1:09
  Speaker 2: So we think that our pricing is really fair and
• 1:14
  Speaker 2: that our new Flick customers will be really well served.
• 1:19
  Speaker 1: Do you give as a business preferential hedge deals to
• 1:22
  Speaker 1: your retail alarm? This is what the Commerce Commission says
• 1:25
  Speaker 1: you do.
• 1:27
  Speaker 2: Yes, we have heard that, but that's not really how
• 1:29
  Speaker 2: it works. Obviously, we are a vertically integrated business, and
• 1:33
  Speaker 2: that's actually a really great thing for customers because what
• 1:35
  Speaker 2: it means is that we can intulate those customers from
• 1:39
  Speaker 2: the volatility that you do see in a renewables market. So, no,
• 1:43
  Speaker 2: we don't give preferential treatment. We offer hedges to the
• 1:47
  Speaker 2: market just like everybody else.
• 1:48
  Speaker 1: But are they on the same terms as you would
• 1:51
  Speaker 1: offer to the smaller players. Because this is the argument,
• 1:54
  Speaker 1: right that the lights of Fleck have been pushed to
• 1:58
  Speaker 1: the wall and forced to because they're not getting the
• 2:02
  Speaker 1: same access to sweetheart deals as if they were a
• 2:07
  Speaker 1: vertically integrated business.
• 2:09
  Speaker 2: Yeah. So one of the things that was really attractive
• 2:11
  Speaker 2: about the Flick proposition is that they did have a
• 2:15
  Speaker 2: really sophisticated hedge box, so they were actually really well hedged,
• 2:19
  Speaker 2: which is just a demonstration that it is possible to
• 2:22
  Speaker 2: build that really strong book even if you are not
• 2:25
  Speaker 2: a generator of electricity. So I don't think that is
• 2:28
  Speaker 2: the case. Flick have decided that they want to exit
• 2:31
  Speaker 2: the market to focus on what their core business is,
• 2:33
  Speaker 2: which is transport and EVS, and so they're getting out
• 2:37
  Speaker 2: of retailing electricity in both New Zealand and Australia. It's
• 2:40
  Speaker 2: not about a takeover of the gent tailors.
• 2:42
  Speaker 1: So if you're telling me that you do not, and
• 2:46
  Speaker 1: you have never given better terms or conditions on a
• 2:50
  Speaker 1: hedge deal to your own retail arm than you would
• 2:54
  Speaker 1: have given to any smaller operator, is the Commerce Commission
• 2:58
  Speaker 1: lying or wrong?
• 3:00
  Speaker 2: I don't think the Comments Commission is lying certainly right. Well,
• 3:06
  Speaker 2: I don't think that we're saying that. I think how
• 3:09
  Speaker 2: how vertical integration works is we don't sell hedges to
• 3:12
  Speaker 2: our retail business. We're one business that generates electricity and
• 3:15
  Speaker 2: we also retail to our customers, and we have some
• 3:18
  Speaker 2: internal mechanisms for how that works, but we certainly don't
• 3:22
  Speaker 2: sell hedges Internally, that's not how it works.
• 3:24
  Speaker 1: What are your internal mechanisms.
• 3:27
  Speaker 2: So we generate electricity and we sell it on the market,
• 3:29
  Speaker 2: and we also buy energy and we sell it to
• 3:34
  Speaker 2: our retail customers, and that's that's how it works.
• 3:37
  Speaker 1: Right, So there's no you cannot see where the Commerce
• 3:40
  Speaker 1: Commission is coming from at all and their complaints and
• 3:42
  Speaker 1: their their sort of request for change.
• 3:45
  Speaker 2: Look, we really welcome any investigation into the industry. We
• 3:50
  Speaker 2: want it to be really strong and robust. We think
• 3:52
  Speaker 2: that's really important. Energy is the cornerstone of our economy
• 3:56
  Speaker 2: and everybody needs to use it in their life. So
• 3:58
  Speaker 2: we'll welcome any investigation. But I'm really confident that we're
• 4:02
  Speaker 2: doing the right thing.
• 4:03
  Speaker 1: All right, least appreciate you time this wanting. Lexa Hannafin,
• 4:05
  Speaker 1: Maridy and Chief Customer Officers with us for more from
• 4:08
  Speaker 1: early edition with Ryan Bridge. Listen live to news talks.
• 4:11
  Speaker 1: It'd be from five am weekdays, or follow the podcast
• 4:14
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