Isaac Davison

Isaac Davison is a NZ Herald political reporter.

Thousands switch to smaller power firms

Mercury Energy suffered the biggest losses, with 1640 of its customers moving to another company. Photo / Brett Phibbs
Mercury Energy suffered the biggest losses, with 1640 of its customers moving to another company. Photo / Brett Phibbs

Large power companies are making aggressive moves to win or keep clients as restless customers increasingly choose to switch companies to cut their costs.

Nearly 36,000 customers changed their electricity provider in February, often to smaller firms, the most for the month since the Electricity Authority began recording the data 12 years ago. In the past year, one in four people have moved between retailers to seek a better deal.

The authority figures were released as the Citizens Advice Bureau reported a rising number of people struggling to pay their power bills.

While the data appeared to show that consumers were becoming smarter and more discerning, energy experts said switching was not available to everyone - poorer people were often turned down when they tried to move companies.

The increased movement between electricity providers appeared to favour smaller firms. The five largest power companies lost 4700 customers in February, while the smaller retailers picked up 4500.

Meridian Energy subsidiary Powershop came out on top - 1786 customers switched to its services.

Powershop chief Ari Sargent put the trend down to poor communication from the larger retailers. "As soon as you attempt to switch suppliers, they throw everything they have at you to stay. For a growing number of people, it's a case of too little, too late."

Mercury Energy suffered the biggest losses, with 1640 of its customers moving to another company. At the beginning of February Mercury announced a 5.8 per cent increase in power prices for households from April 1, citing increased line charges as the reason.

Mercury Energy also shed the most customers in 2011, with 6 per cent of its base, or 23,200 users, leaving for other providers. Mercury Energy general manager James Munro told the Herald: "We never like to lose customers. However, as our most recent half-year operating data shows, while numbers are down we are, on average, selling more electricity per customer and we have made some significant gains in the commercial sector."

Contact Energy also said it planned to raise power bills last month, including an 11.8 per cent increase for Far North homes and a 14 per cent increase for the region's businesses. Despite this plan, it made a net gain of 260 customers in February.

Power companies have become more aggressive in their attempts to win business. Some have responded to complaints from customers by promising to fix their price for three years.

The energy campaigner Molly Melhuish said: "Every single payment to a person to switch is adding to their costs. All the telephoning, all the advertising adds up. And who do you think pays? Everybody else."

- NZ Herald

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