Our Story - Plains Power Ltd
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Our Story

Chapter 1 

09/04/20

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Plains Power begun official operations in January 2018 with a vision of providing our customers (predominantly in the Mid Canterbury area) something different and something better. That was a locally based electricity retailer, where the customer was at the forefront of our minds. By being local, we can adapt to our customers specific needs as opposed to being generic to New Zealand and run from a head office in Auckland/ Wellington or Christchurch.

The game plan was simple, we believed there was a need and a want for our business and there were some blanks to fill in along the way. The game plan is still simple, but those blanks turned out to be horrendous and sometimes unimaginable! 

Our timing of entry couldn’t have been any worse, or as we look at it, any better. The lessons we learnt were paid for from hard earned money or sleepless nights, so they won’t be forgotten. We consider ourselves lucky, as the timing of the market madness meant our volumes were low. If it had of happened two years later and we weren’t prepared a $50,000 a month loss could have easily been $500,000 a month.

In September 2018 we were very much learning on the job, we were hedging electricity to protect our risk and learning more every day. In mid-September we did some exposure modelling to understand what things look like in a worst-case scenario, we used a figure of $250 buy price which was given to us by a business with 20 years’ experience in the industry. September was trading at $65, long run average at Benmore was $75 - $100 so $250 seemed a worst-case scenario alright. October settled at around $320, with some days being $500, $600, $700. We believe four companies ceased trading in this period and subsequently two more. We were well hedged, so survived and will never forget!

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Post 2018 prices remained high. The market was spooked about what could happen. Gas availability, coal price, supply & demand, government renewable energy target were all factors driving uncertainty. Through all this, we maintained our price, so our customers were not disadvantaged for being with a small retailer. All of 2019 prices continued to be higher than historic average and the retail market begun to signal price increases to consumers.

We signalled price increases to all our customers as at April 1 2020. On March 26, NZ went into lockdown for COVID-19, meaning electricity demand significantly dropped across the country, meaning short term prices came crashing back down. On top of that, there is a certain Aluminium smelter at the bottom of the South Island that may or may not stay open. This uses 13% of NZ’s electricity consumption, so if they decide to close, the market will be over supplied in some areas. Too early to predict what all this means for the consumer. 

Aside from the market, business is great! We are growing our business and have a great range of customers that include, residential, commercial, dairy sheds, irrigation pumps, industrial operations and generation. The electrification of the world is well underway, and we are on track to help the consumers of Mid Canterbury be part of that process and provide them tools and options to use electricity smarter.

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