In an election centred on New Zealand’s cost-of-living crisis, it’s perhaps unsurprising to see parties return to a familiar idea for tackling rising power bills: breaking up the big electricity gentailers.

Both New Zealand First and the Greens want to split the big gentailers into separate generation and retail businesses.

The appeal is straightforward. If independent retailers could buy electricity on fairer terms, the argument goes, greater competition should bring household power prices down.

And prices are rising. The Electricity Authority found households and small businesses paid an average 6.8% more for electricity in the first half of 2026. But more than half of that increase came from higher network charges, with generation costs and retail margins accounting for much of the rest.

National, meanwhile, has focused its latest energy policy on those network costs, promising to review how lines companies are regulated.

But it hasn’t gone as far as breaking up the gentailers – something Finance Minister Nicola Willis has argued would create “massive instability”.

I have studied this area for decades. A review I conducted indeed points to some easily overlooked consequences of separating the two.

Why generation and retail go together

Combining generation and retailing gives electricity companies a critical advantage: protection against swings in wholesale power prices.

A gentailer can supply customers from its own generation, while buying or selling electricity on the wholesale market only as needed. A standalone........

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