Genesis Defends Vertically Integrated Model Amid Break-Up Calls

Genesis Energy's chief executive Malcolm Johns defended the company's vertically integrated model amid calls to break it up and separate its generation and retail arms.

The government wants to sign a contract for a new billion-dollar liquefied natural gas (LNG) import terminal, funded through a user-pays model, before the end of this parliamentary term.

However, Johns said he couldn't yet tell Kiwis how much their power bills would rise once the terminal was built and Genesis started buying LNG, citing that the procurement process belongs to the government.

He suggested costs would flow through to his customer base if Genesis bought LNG through the user-pays model, stating that companies can't absorb costs and need to recover them through revenues earned.

The gentailers, firms that both generate and sell power, are under pressure from at least two parties, NZ First and the Greens, who want them broken up.

Johns argued that 10 independent reviews over two decades found no evidence that structural separation would lower prices, pointing out that electricity is a volatile energy system affected by weather conditions.