Part of probe then took job at Meridian

WELLINGTON: The Electricity Authority is facing calls to peer review the outcome of an ongoing probe into alleged market abuse, after one of its top staff resigned to join a company facing accusations of market manipulation.

Rory Blundell, the authority’s general manager of market performance since 2015, has resigned to become group strategy manager at Meridian Energy, New Zealand’s largest electricity generator.

The departure comes as the authority investigates a claim of an undesirable trading situation (UTS), accusing Meridian and Contact Energy of overcharging for electricity while spilling water from their South Island dams.

In the complaint, made by a group of small electricity retailers, Haast Energy Trading alleges that between November 10 and December 12, Meridian’s generation business had extracted excess revenue of $38 million while Contact had extracted $23 million.

Both companies have denied any wrongdoing and said they only spilled water from the dams when they needed to.

Meridian owns the Manapouri Power Station as well as most of the generation on the Waitaki system. Contact owns the Clyde and Roxburgh dams on the Clutha River.

The investigation is ongoing. Luke Blincoe, chief executive of Electric Kiwi, said the authority should clarify exactly what role Mr Blundell had played in the investigation.

‘‘It would appear that there may have been a conflict of interest if he was involved in investigating the UTS,’’ Mr Blincoe said.

‘‘We would, obviously, rely on the EA to act in a proper fashion in terms of ensuring that if he’s been part of that investigation process to date, while evidently been part of a recruitment process, they should probably have some sort of peer review of that assessment to ensure that the conflict, or even the perception of any conflict, can be dealt with.’’

Mr Blincoe said the complainants wanted to have confidence in the outcome of the investigation.

‘‘We’re not saying that there is one, but the perception of a conflict is as damaging as a conflict in itself, so that should be managed.’’

Along with Haast and Electric Kiwi, Ecotricity, Flick Energy, Oji Fibre, Pulse Energy Alliance and Vocus are also parties to the UTS claim.

A spokeswoman for the authority appeared to reject the call for review, without being clear what role Mr Blundell may have had in the investigation.

The resignation ‘‘does not impact any investigation currently under way by the authority,’’ a spokeman said.

Asked to clarify Mr Blundell’s role in the UTS claim investigation, the spokesman said the regulator ‘‘has a team of people assessing the UTS claim, including tier three managers from Market Performance’’.

Ultimately, the board of the authority makes a decision on whether there has been a UTS on the basis of a recommendation from the team investigating the claim.

Meridian said only that Mr Blundell would join the company in late March ‘‘after an appropriate period to manage any potential conflicts as is standard practice’’. — The New Zealand Herald