A prominent educational institution in the Waikato operates a large campus with boarding facilities, relying heavily on natural gas for heating and hot water. Energy costs represent a significant portion of its operating budget, making cost control a priority.
The Challenge
As the school’s existing gas contract approached renewal, the incumbent supplier presented a renewal offer. While straightforward, the proposed rates were substantially higher than current market prices. Accepting the offer would have locked the school into two more years of inflated costs, putting pressure on budgets that could otherwise support educational programs.
The school needed:
A cost-effective solution without sacrificing service quality.
A smooth transition with minimal administrative burden.
Confidence that the new contract would remain competitive over time.
The Solution
Total Utilities conducted a comprehensive review of the school’s gas usage and current contract terms. Leveraging market expertise and supplier relationships, the team:
Benchmarked the incumbent’s renewal offer against competitive market rates.
Ran a competitive tender process with multiple suppliers.
Negotiated favorable terms and managed the transition seamlessly.
The Outcome
The new gas supply contract delivered $57,000 in savings over two years compared to the incumbent’s renewal offer. Additional benefits included:
Transparent pricing and improved contract terms
Budget certainty with locked-in competitive rates
Confidence in long-term cost control
Key Insights
Benchmarking renewal offers can uncover significant savings.
Competitive tendering drives better pricing and terms.
Expert procurement support ensures compliance and reduces risk.
“Total Utilities made the process simple and delivered real savings. Their expertise gave us confidence that we were getting the best deal.” – School Business Manager
How Total Utilities Can Help Your Business
Don’t let rising energy costs eat into your bottom line. At Total Utilities, we help Kiwi businesses lock in the most competitive natural gas rates available. Our expert team keeps an eye on market trends, negotiates on your behalf, and makes sure you get the best deal—saving you time and money.
Take control of your energy costs today.
👉 Get in touch with Total Utilities now and start optimising your natural gas pricing to future-proof your business.
Inghams Enterprises is one of New Zealand’s leading poultry producers, operating multiple facilities nationwide. With a strong focus on cost efficiency and sustainability, Inghams aimed to reduce energy costs and improve environmental performance of its energy contracts.
Challenge
Inghams faced rising electricity costs and needed to explore long-term procurement options. The challenge was to identify a solution that balanced:
Cost certainty
Sustainability outcomes
Operational feasibility
Options considered included traditional electricity supply, on-site solar, and market-based renewable energy solutions.
Our Approach
Detailed financial modelling and market analysis of current and future electricity pricing
Evaluation of multiple procurement pathways: traditional supply, behind-the-meter solar, and Power Purchase Agreements (PPAs)
Feasibility assessment of a solar farm at the Waitoa site
Facilitation of direct engagement with Lodestone Energy to structure a tailored long-term supply agreement
Renée’s analysis goes beyond identifying problems. She’s actively advocating for change through two petitions aimed at reshaping New Zealand’s energy strategy and reforming the Emissions Trading Scheme (ETS).
🔑 Structural Reform
Renée argues that New Zealand’s government structure needs simplification. Overlapping and conflicting ministerial portfolios hinder long-term planning. She points to countries like Norway and Singapore as models of efficient governance and strategic foresight.
🔋 A Long-Term Energy Strategy
At the heart of her proposal is a 50-year bipartisan energy plan—one that balances traditional fuels with renewable innovation. Key elements include:
Continued use of coal, gas, LPG, diesel, and petrol where necessary for energy security and affordability.
Support for renewables like geothermal, solar, wind, biomass, and emerging technologies (e.g., hydrogen, biogas, small nuclear).
Infrastructure upgrades to support distributed generation and grid stability.
Regular reviews to adapt to evolving technologies and energy needs.
🧠 Independent Expert Advisory Panel
Renée proposes the creation of an independent advisory panel made up of representatives from:
Industry
Academia
Technical energy experts
Finance
Community
Policy sectors
This panel would guide and review the national energy strategy, ensuring diverse perspectives and consensus-driven decisions.
💡 ETS Reform
The current Emissions Trading Scheme (ETS) is under scrutiny. Renée’s paper calls for:
Removing electricity generation from the ETS to reduce household power bills.
Allowing businesses to reinvest ETS costs into their own decarbonisation efforts.
Applying ETS only when viable alternatives exist.
🥕 Incentives Over Penalties
Rather than punitive measures, Renée advocates for targeted funding and incentives—similar to Australia’s approach. Supporting industry and households in their transition is key to achieving meaningful decarbonisation.
🗳️ Support the Petitions
Renée has launched two petitions to drive change:
📌 Energy Strategy Petition
Calls for a realistic, long-term energy plan that includes both traditional fuels and renewables, with regional flexibility and innovation.
📌 ETS Reform Petition
Challenges the current ETS framework, proposing reforms that reduce costs and empower businesses to invest in sustainable practices.
Renée Jens is urging New Zealanders to support these initiatives and help shape a smarter, more resilient energy future.
Since 2018, the New Zealand Electricity market has been defined by falling natural gas supplies, record quantities of coal to be burned at Huntly, inconsistent hydro storage levels and rising costs. All of these factors have led to price instability, and the timing of your next electricity contract negotiation can have a significant impact on the prices offered.
Example: Food and Beverage Industry In this example, our proactive approach to procurement achieved the green pricing before the customer’s contract end date.
In total, eight retailers bid for forward energy supply.
Had they waited until the last minute, the likely number of participant retailers would have been reduced to 3 or 4.
Advance pricing is 32% lower than last-minute pricing.
Example: Hotel Industry In this example, our proactive approach to procurement achieved the green pricing before the customer’s contract end date.
The customer was able to smooth out their energy contract costs over the term of supply.
Advance pricing is 38% lower than last-minute pricing.
Waiting until the last minute to renew your electricity contract could be risky.
Why Act Early?
Allowing your electricity contract to expire or delaying securing a new one can expose your business to unnecessary risks and higher costs. Electricity prices are highly volatile due to factors like hydro storage, so timing your contract negotiation is crucial.
Waiting too long can lead to significantly higher electricity prices. Delaying until the last minute often leaves you with fewer options and less favorable terms. By acting early, you can negotiate better terms and avoid disruptions in service or unexpected cost increases.
Strategic Planning
Start looking at prices six months before your contract ends. This gives you time to find the best deal or reassess the market closer to contract expiry.
Optimal Contract Term
The best term for your electricity contract depends on market conditions and your business goals. Longer-term contracts can offer price stability and potentially lower rates, while shorter-term agreements provide flexibility but often come with higher costs and risks.
Total Utilities procures a range of contract terms and provides recommendations that balance short-term flexibility with long-term price security, ensuring your contracts align with your business strategy and market conditions.
Shop Around
In addition to acting early, it’s essential to compare different offers. The electricity market is competitive, and prices can vary significantly between providers. By comparing offers, you can ensure your current supplier’s renewal offer is competitive.
Proactive Procurement Total Utilities offers services to help you:
Why Total Utilities? With over two decades of experience, Total Utilities conducts around 300 market reviews annually, providing strategic advice tailored to your business needs. They help optimise utility costs and ensure reliable procurement.
If 2024 taught us anything, it’s that unpredictability is the new norm. From gas shortages and hydro lake levels nearing rock bottom to record highs and lows in pricing, the year had it all.
One thing is clear: the current market structure isn’t serving commercial and industrial customers well. Short-term issues have impacted long-term pricing, forcing customers to pay a premium for future energy, even when conditions might improve.
In a previous article, I delved deeper into how coal sets the overall price in a largely renewable energy grid. You can read more about it here.
Looking Ahead to 2025
As we step into 2025, hydro storage levels are at 85% capacity, which is 22% higher than usual for this time of year. Wholesale electricity spot pricing remains low, with thermal generation contributing only about 3-5% to the grid. Current prices are around 4-5c/kWh, a significant drop from last January’s 25c/kWh. However, with limited natural gas availability and coal firming the market, price volatility is more pronounced, especially during dry periods when wind generation drops.
Average Daily Wholesale Spot Pricing
The ASX Energy Futures Market
Forward market pricing remains stubbornly high on the ASX Energy Futures market, which sets the overall forward price for retail contracts for large commercial and industrial customers. The current quarter (Jan-Mar 2025) is priced around 12c/kWh in the North Island and 7.4c/kWh in the South Island.
The ASX Energy Futures market is dominated by the big four generators: Contact, Genesis, Mercury, and Meridian. These generators offer volume into the market for participants, which can include other generators, retailers, major energy users, or investment houses.
Long-Term Pricing Trends
Over the past year, long-term pricing on the ASX has steadily increased as natural gas supplies dwindle. The market seems to be factoring in more risk as coal becomes the dominant fuel for managing limited hydro storage.
North Island pricing for 2026, 2027, and 2028 has risen by 19%, 26%, and 11% respectively since January last year. Similarly, South Island prices have increased by 28%, 35%, and 14%. Notably, pricing for 2028 only became available on the market from October 1st last year. The forward price curve has also shifted from a staggered reducing price to an almost flat price within any given year.
North Island Pricing ASX Energy Futures
The Future of Firming Fuels
This trend suggests that coal will remain the firming fuel of choice for the foreseeable future, despite calls for liquid natural gas imports as a lower carbon emission option. The industry appears divided on future firming solutions, adding to the uncertainty.
As we navigate through 2025, staying informed and adaptable will be key to managing the ever-changing energy landscape.
Navigating the Future of Renewable Energy and Market Volatility
The announcement of new renewable generation projects is exciting, but it comes with its own set of challenges. Much of the new capacity is in solar and wind, both of which are intermittent and cannot be relied upon for firming. While battery storage is becoming more economically viable, it hasn’t reached the point where it can fully replace traditional firming methods. New hydro or geothermal developments, which could provide the necessary baseload generation to support intermittent sources, are facing lower priority due to high costs and resource consent issues.
What to Expect in the Coming Year
As we look ahead, the energy market is expected to remain volatile. Both Transpower and the Gas Industry Company have warned that natural gas production may fall below demand during the upcoming winter. This shortfall will likely keep energy prices unstable. Additionally, the commissioning of new generation projects is progressing slowly, meaning the reliance on fossil fuels for firming will continue in the short term.
Preparing for Contract Expiry in 2025
If your electricity contract is set to expire in 2025, it’s crucial to start planning early. Seeking market pricing well in advance of your contract’s expiry date allows you to set realistic budgets and mitigate the impact of short-term volatility.
Consider exploring solar options, whether on-site or off-site. Both approaches enable you to purchase solar energy as a commodity, reducing your exposure to price fluctuations in the broader energy market.
How Total Utilities Can Help
Total Utilities is here to assist you in navigating these complexities. We offer advisory services to help you evaluate your options and make informed decisions about your energy contracts and renewable energy investments. For more detailed advice, you can read our article on managing utility contract expirations here.
By staying proactive and informed, you can better manage the uncertainties of the energy market and make strategic decisions for your business’s future.
