Understanding the Electricity Industry

Power is distributed from its generation source though the high voltage National Grid that is managed by Transpower; through substations, transformers and medium voltage lines (known as feeders) or cables that are managed by electricity distributors (e.g. PowerNet), to low voltage equipment that connects via a meter to homes and businesses.

understanding

Generation (Power stations)
Generation companies produce electricity and feed it into the National Grid. There are six main generation companies in New Zealand:

  • Contact Energy Limited
  • Genesis Power Limited – State Owned Enterprise (SOE)
  • Meridian Energy Limited – SOE
  • Mighty River Power Limited – SOE
  • TrustPower Limited
  • Todd Energy

Transmission (High voltage power lines)
Transpower New Zealand Limited transports electricity from generation stations through the National Grid to various grid exit points around the country. At the grid exit points the local distribution network companies like PowerNet take over the ownership and distribution of electricity.

Distribution (Medium – low voltage power lines)
Distribution network companies own and manage the lines in local areas, which transport electricity between substations at the grid exit points, through the medium and low voltage lines and cables to industrial, commercial and residential customers connected to the electricity network.

PowerNet is a distribution network company that manages the electricity network on behalf of a number of network owners and delivers electricity to you on behalf of your energy retailer. The owners of the elecricity networks managed by PowerNet are….

  • Electricity Invercargill which is owned by the Invercargill City Council and covers most of Invercargill City and the Bluff township.
  • The Power Company which is owned by everyone connected to that network through a Trust known as the Southland Electric Power Supply Consumer Trust, and covers Southland and some outlying areas of Invercargill City.
  • OtagoNet Joint Venture which is jointly owned by Electricity Invercargill, The Power Company and Marlborough Lines and covers North, South and East Otago.
  • Lakeland Network which is an embedded electricity network in Frankton, near Queenstown, that is owned by Electricity Southland.
  • Stewart Island Electrical Supply Authority which is owned by the Southland District Council.

PowerNet is responsible for maintaining and managing the local network of lines to make sure supply is as reliable as possible and ensures the voltage and frequency of the power meets various supply quality standards.

Distribution network companies generally sell their services directly to retailers. However, there are some very large customers who are supplied directly such as the New Zealand Aluminium Smelter at Tiwai Point.

Retailer (Energy supplier to the customer)
Electricity retailers sell electricity to business and residential customers. There are six energy retailers connecting to the PowerNet network.

Your electricity account includes charges from your electricity retailer for the quantity of power that you have used. Your electricity accounts also include line fees that are charged to the electricity retailer by both the network company and Transpower.

Customers
Customers are the end users who are connected to the electricity network. Customers can range from residential households to large commercial operations such as meat processing plants. Customers can choose which retailer in their area they want to buy electricity from.