A report published this week by investment analysts Forsyth Barr laid out something that should be front-page news for anyone paying a power bill in New Zealand: wholesale electricity prices in June 2026 were the third-lowest for any June on record, and the lowest since 2004.
The wholesale price at Ōtāhuhu — Auckland's main grid reference point — averaged just 4.1¢ per kWh. A year ago, the same month averaged around 12.8¢/kWh. That's a 68% drop in the price of electricity at the generation level, in a single year, during winter.
And retail prices? They haven't moved.
What's driving wholesale prices down
This isn't a one-off. Three structural shifts are happening at the same time, and they're compounding each other.
Hydro storage is exceptionally strong. National hydro storage ended June at 135% of the long-run average — up 32 percentage points on a year earlier. Full lakes mean cheap generation, and plenty of it. When the country's biggest power source is running well above average, wholesale prices reflect that immediately.
Grid-scale batteries are now smoothing the peaks. June 2026 was the first winter month in which large grid-scale batteries were fully operational. Contact and Meridian each brought 100MW batteries online this year. What those batteries do is store cheap electricity and release it during high-demand periods — directly replacing the expensive gas peakers that used to set the price when the grid was stressed. Forsyth Barr noted that about half of the price decline relative to comparable hydro conditions in June 2023 was explained not by the lake levels, but by the near-disappearance of extreme peak pricing. Three more grid-scale batteries are currently under construction.
Renewables are now running the country. Renewable generation supplied 93% of electricity in June 2026. Over the past 12 months, the figure is 92% — a new record, ahead of the previous high of 91% set in the 2023 financial year. The more the grid runs on wind, solar and hydro rather than gas and coal, the lower the structural cost of generation.
at Ōtāhuhu vs one year ago
June 2026 generation
vs long-run average
The dry-year risk is shrinking
The most common reason people hesitate before switching to a wholesale spot plan is dry-year risk. The argument goes: NZ is heavily dependent on hydro, so in a dry year, lake levels fall, generation gets scarce, and spot prices spike to punishing levels. It happened in 2001. It happened in 2008. It's a legitimate concern.
That risk hasn't disappeared — but it's materially smaller than it was, and it's getting smaller each year.
Forsyth Barr's report notes that long-dated electricity futures — which reflect the market's expectation of prices years from now — have fallen significantly, partly because Meridian now has access to contingent storage at Lake Pūkaki specifically to manage dry-year conditions. Combined with the growing fleet of grid-scale batteries (which can cover peak demand without burning through hydro storage) and the expanding renewable generation base, the scenarios that used to cause sustained high-price periods are becoming harder to trigger.
The grid of 2026 is structurally more resilient than the grid of 2020. And the grid of 2028, with more batteries and more geothermal capacity under construction, will be more resilient again.
The main risk on a spot plan has always been a sustained high-price period driven by low hydro, high demand, and no alternatives. Batteries absorb peaks. More renewables reduce dependence on any single source. More storage cuts dry-year exposure. Each of these directly reduces the risk that kept people on flat-rate plans.
Why your retail bill hasn't budged
If wholesale prices have dropped 68% in a year, you'd expect to see something happen to the price you pay. You haven't. And there's a reason for that.
Retailers on standard flat-rate plans don't buy electricity at today's spot price and pass it to you in real time. They hedge their position using financial contracts — locking in future prices months or years in advance. Those contracts were written when prices were higher. The retailer is protected from the downside of buying at today's low prices; you receive none of the upside either.
Forsyth Barr did note that the fall in wholesale prices "should ease pressure on wholesale-exposed customers and, over time, on the energy component of retail pricing." Over time. That's the qualifier that should catch your attention. Wholesale prices fell 68% in a year. Retail prices take years to respond — if they respond at all.
The hedging contracts that insulate retailers from price swings also insulate you from price drops. That's the trade-off you make when you choose a flat rate: certainty in both directions. No nasty surprises in a bad month. But also no benefit when the market is delivering the cheapest electricity in two decades.
Right now is an unusually good time to be on spot pricing
The timing matters here. Switching to a wholesale spot plan always made sense on average over a full year — the data has consistently shown that wholesale prices are lower than what flat-rate retailers charge. But the argument is particularly strong right now, for reasons that converge:
- Wholesale prices are near record lows. The immediate savings on a spot plan, right now, are as large as they've been in years. Every unit of electricity you use at 4.1¢/kWh instead of a flat-rate equivalent of ~20–25¢/kWh (the wholesale component embedded in retail rates) is money staying in your pocket.
- The peak spike risk is lower than it's ever been. Grid-scale batteries specifically target the short, sharp price spikes that make spot pricing feel risky. With batteries smoothing the peaks, the scary $2/kWh spikes that drive anxiety about spot plans are happening less often and for shorter durations.
- The dry-year risk is structurally reduced. More storage, more renewables, and specific dry-year management mechanisms mean the sustained high-price winters that represent the real downside of spot pricing are less likely than they were five years ago.
- Retail prices aren't going to drop to match the wholesale market. Waiting for your flat-rate retailer to pass on these savings isn't a strategy. Forsyth Barr says it might happen "over time." That's a polite way of saying don't hold your breath.
None of this means spot pricing is risk-free or right for everyone. If your power usage is completely inflexible — everything has to run when it has to run, regardless of price — the savings are harder to capture, though you'll likely still come out ahead on average. But if you have an EV, a hot water cylinder, a dishwasher, a battery, or anything else that can shift to run when prices are cheap, the case right now is as compelling as it's been.
The NZ electricity market is in an unusual moment: wholesale prices near record lows, dry-year risk falling, batteries smoothing the peaks that made spot pricing feel unpredictable. The structural shift toward renewables isn't reversing. The trend is toward cheaper, more stable wholesale electricity — not away from it.
Flat-rate plans were always a way of paying for certainty. Right now, you'd be paying for certainty you don't need, at a price that doesn't reflect the market you're actually in.