Power shares

[Snoopy]

Under current pricing mechanism, all generators are paid the same price, which is based on the most expensive generation bid at the time. This is ridiculous. Some generators get free fuel (hydro, solar, wind, geothermal), so their profit is increased. Some generators have high maintenance costs (geothermal, thermal), so their profit is reduced. Some generators have high fuel costs (gas, coal, diesel), so their profit is reduced. Some generators have emissions costs, etc. It is clear that fuel cost and maintenance cost (as declared in annual audited accounts) must be factored into electricity payment mechanism so that generation returns are independent of these costs, otherwise it's just a profit transfer from the consumer to low cost generators

You missed out a couple of salient facts:
1/ The government still owns 50% of Meridian, Genesis and Mercury.
2/ The government has not had to shell out any money to build new power stations themselves since they built the Clyde dam some 30 years ago, and the current electricity system was implemented.

In fact, all of the incremental power stations added to the national electricity network this century have been built by the 'low cost generators' Meridian, Mercury and Contact. It is the profitability of these three companies that has allowed them to implement their build programs, at no cost to the tax payer.

Why should generators with high running costs and maintenance costs be incentivised?

SNOOPY

[Panda-NZ-]

It comes at a cost to their consumer and industrial customers. The industrial customers who can't get special deals like Rio become uncompetitive in world markets despite hydro being cheap.

I suppose blackouts NZ is now at risk for have a PR risk to these businesses but they seem to have determined it can be managed by "blaming something else" like green targets, transpower, weather events rather than their failure to increase supply.