Prime Energy named as electricity retailer who defaulted on payment to Manawa

Manawa Energy downgraded its earnings forecast by $35 million yesterday, of which about half was due to the provision for the potential bad debt.

Prime Energy – the electricity retailer that defaulted on its payment to Manawa Energy yesterday – is working with the NZX-listed company and the Electricity Authority (EA) to keep the lights on for its customers.

Yesterday, Manawa told the NZX it faces a sharply lower earnings forecast for the 2025 year after one of its customers defaulted on a payment.

That customer has since been identified as Prime Energy, a boutique Auckland-based company that specialises in the supply of electricity and gas to business and commercial customers.

Prime Energy is owned by Michael Skates, who is also the sole director of the business, Companies Office records show.

Manawa downgraded its earnings forecast by $35 million, of which about half was due to the provision for the potential bad debt.

“Manawa will today terminate the electricity supply and services agreement with the electricity retailer,” the company said.

“This will allow Manawa to immediately initiate steps to reduce the risk of further exposure.”

But in a statement today, the EA said it was working with both Manawa and Prime to come to a “managed resolution” to ensure continuity of supply to Prime’s customers.

“As the regulator, our priority is ensuring no disconnections take place and that a resolution is effectively managed for impacted customers,” EA chief executive Sarah Gillies said.

Manawa has said it will work to recover as much of the outstanding debt as possible.

Manawa’s share price fell sharply yesterday – sinking 7.9% to $3.94 – when trading resumed after a trading halt on Wednesday.

Its share price rebounded slightly today, up 3.1% to $4.06.

The situation comes as the electricity sector faces scrutiny over high power prices.

Three major energy using businesses have closed up operations in the last week. Pan Pac Forest Products stopped its pulp production near Napier last weekend.

On Wednesday, Oji Fibre Solutions said its Penrose paper recycling plant, which employs 75 people, may have to close due to high energy costs.

Winstone Pulp International has also decided to pause work for 14 days at its two central North Island operational sites because of high power prices.

The Major Energy Users Group has warned more major power users are likely to be affected until prices come down.

Wholesale power prices - which are volatile even in the best of times - have been very high due to low lake levels and constrained gas supply.

The Electricity Authority, the body responsible for the governance and regulation of New Zealand’s electricity industry, says it is taking the current power shortage “extremely seriously” and it would use its powers to seek additional information about the current pricing and would make that public.