INDEPENDENT NEWS

NGC to Exit Electricity Retailing

Published: Wed 25 Jul 2001 09:47 PM
25 July 2001
NEWS MEDIA RELEASE
NGC to Exit Electricity Retailing and Enters Alliance
Natural Gas Corporation Holdings Limited (NGC) has reached an agreement to sell its 290,000 North Island commercial and residential electricity customers to Genesis Energy. The agreement will take effect from 1 August 2001, after satisfaction of certain conditions. This agreement, following the recent sale of South Island customers to Meridian Energy, means that NGC, operating under the On energy brand, is withdrawing from the electricity retailing market.
The sale will close off NGC’s retail exposure to the wholesale electricity market. Managing Director, Mr John Barton, declined to disclose the value of the transaction. However, Mr Barton affirmed he did not expect the sale would result in any further write down of NGC’s assets. While exiting the electricity retail market, NGC was retaining the majority of the businesses acquired from TransAlta New Zealand last year, he said.
NGC will retain its electricity generation assets and its natural gas customer base of approximately 100,000 industrial, commercial and residential gas users throughout the North Island. NGC will also retain its meter business and, as part of the sale, NGC will acquire Genesis’ electricity meters and provide meter services to Genesis for its residential electricity customers.
A strategic marketing alliance is being formed with Genesis to offer dual fuel and joint promotions to the retail market, under the Genesis brand, for gas and electricity products to existing and new customers. NGC will continue to provide full customer support services for large industrial gas customers.
“We believe that the core gas business of gas transmission, distribution, wholesaling, and sales to industrial customers, combined with the electricity generation and the strategic alliance for gas retail, creates a very sound business for NGC going forwards,” said Mr Barton
Mr Barton said today outstanding progress had been made by On energy to improve customer service since NGC formally took over the electricity retail business last year and it was disappointing to be exiting the business. However, the way the hedge market and spot markets are functioning meant the risks for a net retailer were unacceptable
He said a basic intention of the electricity market development was to encourage retail competition. This was not being achieved. Mr Barton said NGC had decided to exit electricity retailing because it was not confident that the wholesale electricity market provides an environment, now or in the future, for net retailers to compete effectively.
Notwithstanding the sale, consultation and retail advisory arrangements with the Hutt Mana Energy Trust will continue.
There will be a transition period of several months during which NGC will provide Genesis with transitional call centre, billing and credit services. Customers are not required to do anything at this point and will be kept fully informed during the transition process.
ENDS

Next in Business, Science, and Tech

Misinformation Circulating On Biodiversity Policy
By: Forest And Bird
Scientists Say Methane Emitted By Humans ‘vastly Underestimated’
By: NIWA
Record Dry Spells And Effects On Forests – Expert Reaction
By: Science Media Centre
Official Cash Rate Remains At 1.0 Percent
By: The Reserve Bank of New Zealand
Novel coronavirus detected in China –Expert Reaction
By: Science Media Centre
Launch Of Parliament Petition To Remove Aluminium Dross
By: New Zealand First Party
UPDATE: Elderly West Coast Man To Lose 70% Of Farm In SNA ‘landgrab’.
By: Lois Williams - Local Democracy Reporter
Blatant Attack On Private Property Rights
By: New Conservative
Scaling Climate Finance: Forest Finance Instruments
By: The Policy Observatory
Biodiversity process earns praise
By: Forest And Bird - Federated Farmers
Global Rescue Plan to Stop Mass Extinction 'Hopelessly Weak'
By: Common Dreams
23 Former Diplomats Urge Global Leaders To Adopt Paris-Style Agreement To Protect Biodiversity
By: Common Dreams - Jessica Corbett
Scoop Coverage: Biodiversity Information and Journalism
By: Scoop Full Coverage
I tried to believe capitalism and the planet can coexist
By: The Conversation
Damning New Report Says Every Nation Undermining Children
By: Common Dreams - Andrea Germanos
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media