Vector admits its customer service could be better

By RICHARD BRADDELL


WELLINGTON - Auckland electricity line company Vector has confessed that it is less than happy with the service it is giving to consumers, but says it is getting better.

The frank admission was made to the Government's electricity inquiry this week when chief executive Dr Patrick Strange said six-monthly customer surveys were producing results that did not always make the company happy.

"We've got a way to go," he said.

While small customers expected faults from time to time, they wanted to know when they would be fixed and that they would be handled professionally.

Dr Strange also said the one-size-fits-all formulation of the past no longer suited everybody because quality standards demanded by customer groups varied. While householders might manage a three-hour outage, retailers would start losing money after four minutes because of the inability to transact Eftpos.

But while Vector aimed to cater to individual customer needs, it planned to simplify a host of tariffs. Dr Strange saw little reason for the continued distinction between small commercial and residential rates.

He also spoke in support of lower fixed charges as a proportion of the total lines account, with greater reliance on variable line charges. Such a move was forcefully argued for by generator and retailer Mighty River Power, which said that high fixed charges made three-quarters of Auckland's retail market not worth competing for.

Vector's view was that lowering fixed charges was a good idea, simply because customers wanted it.

"I hear the economists talking about the necessity to capture sunk costs in a non-distortionary way ... I have to say that I think most of it is a little bit of nonsense."

Vector is one of the few lines companies that in the line-energy split last year chose to contract directly with customers rather than through the energy retailer. Its rationale was that by retaining the customer relationship it kept the incentive to be responsive, rather than drifting back into what Dr Strange said was the previous habit of treating customers as "applicants."

Dr Strange accepted that some kind of regulation was necessary, but whatever form it took, it would be imperfect, because that was the nature of regulation.

However, he said the present disclosure regime for line companies was in particular need of upgrading because it was too focused on inputs, as opposed to customer-focused outputs.

He said the biggest influence on prices in the future would be the amount of capital expenditure required by the line companies.

In Auckland, the issue was particularly acute, he said. Much of the network was nearing the end of its life, being around 70 years old, and was coming under increasing pressure from urban infill and growing demands from business.