Retailer calls for review of electricity probe as key regulator staffer quits to join Meridian

A group of electricity retailers have accused Meridian, owners of the Benmore Dam, and Contact Energy of manipulating prices in late 2019. Photo / file

The Electricity Authority (EA) is facing calls to peer review the outcome of an ongoing probe into alleged market abuse, after one of its top staff resigned to join a company facing accusations of market manipulation.

Rory Blundell, the EA's general manager of market performance since 2015, has resigned to become group strategy manager at Meridian Energy, New Zealand's largest electricity generator.

The departure comes as the EA investigates a claim of an undesirable trading situation (UTS), accusing Meridian and Contact Energy of over-charging for electricity while spilling water from their South Island dams.

In the complaint, made by a group of small electricity retailers, Haast Energy Trading alleges that between November 10 and December 12, Meridian's generation business had extracted excess revenue of $38 million while Contact had extracted $23m.

Both companies have denied any wrongdoing and say they only spill water from the dams when they need to.

Meridian owns the Manapouri Power Station as well as most of the generation on the Waitaki system. Contact owns the Clyde and Roxburgh dams on the Clutha River.

The investigation is ongoing.

Luke Blincoe, chief executive of Electric Kiwi, said the EA should clarify exactly what role Blundell had played in the investigation.

"It would appear that there may have been a conflict of interest if he was involved in investigating the UTS," Blincoe said.

"We would, obviously, rely on the EA to act in a proper fashion in terms of ensuring that if he's been part of that investigation process to date, while evidently been part of a recruitment process, they should probably have some sort of peer review of that assessment to ensure that the conflict, or even the perception of any conflict, can be dealt with."

Blincoe said the complainants wanted to have confidence in the outcome of the investigation.

"We're not saying that there is one, but the perception of a conflict is as damaging as a conflict in itself, so that should be managed."

Along with Haast and Electric Kiwi, Ecotricity, Flick Energy, Oji Fibre, Pulse Energy Alliance and Vocus are also parties to the UTS claim.

A spokeswoman for the EA appeared to reject the call for review, without being clear what role Blundell may have had in the investigation.

The resignation "does not impact any investigation currently under way by the Authority," the spokeswoman said.

Later asked to clarify Blundell's role in the UTS claim investigation, the spokeswoman said the regulator "has a team of people assessing the UTS claim, including tier three managers from Market Performance".

Ultimately the board of the EA makes a decision on whether there has been a UTS on the basis of a recommendation from the team investigating the claim.

Meridian declined to comment beyond saying Blundell would join the company in late March "after an appropriate period to manage any potential conflicts as is standard practice".