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The Ministry of Economic Development has today officially named Powershop.co.nz as cheapest electricity supplier to Auckland, Wellington, Christchurch, Dunedin, New Plymouth and Palmerston North in its Quarterly Survey of Electricity Prices.

Powershop.co.nz CEO Ari Sargent says the news was proof that Powershop.co.nz’s low cost business model offered the best deal for consumers.

“It’s all about keeping costs low. The internet is our head office and the rent for a web address isn’t nearly as much as a flash high rise building. We’re small and everything we do, we do to save our customers money,” he said.

Simon Lawrence Manager of Energy Information at the Ministry of Economic Development (MED) encouraged electricity consumers to look at their options.

“The MED encourages people to shop around and Powershop can offer customers good savings compared to other retailers,” Mr Lawrence said.

Mr Sargent said that Powershop’s ability to deliver the cheapest electricity in New Zealand was a testament to the power of increased retail competition

“It’s a simple equation - more competition always creates cheaper prices for consumers. The more small, low cost retailers like Powerhsop that you can get into every market, the cheaper prices will be,” he said.

Mr Sargent said the key to making it easier for new retailers to enter the market was making it easier to buy forward hedge contracts from generators on the wholesale market. Powershop is unusual among power companies as a pure play retailer. Almost all other electricity retailers are also power generators.

“The liquidity of hedge contracts on the wholesale market is the single largest factor determining the level of competition in New Zealand retail electricity markets. If they were easier to buy and sell there’d be more competition from small companies like us and cheaper prices for consumers,” he said.

Mr Sargent said he hoped that the Electricity Market Review currently being undertaken by the Ministry of Economic Development would address this issue.

To read the Quarterly Survey of Electricity Prices, visit MED - Quarterly Survey of Domestic Electricity Prices