Empower seeks lines deal in domestic push

Empower wants to expand outside the business sector, but it needs agreements with lines companies finds MARK REYNOLDS.


Fledgling retail power company Empower expects to begin selling electricity to household customers as early as next month.

But a stoush it is having with lines company United Networks could delay the emergence of that new household power service for consumers north of the Harbour Bridge in Auckland, as well as in Wellington and Tauranga.

Empower wants to expand its operations outside of the business sector, but it needs agreements with lines companies like United to transmit electricity. It has had an agreement with United for a couple of years, but United has signalled a change to the contract that would make Empower responsible for consumer inquiry services related to the lines operations.

Empower director Andrew Hawkin said the change to the contract terms were unfair, and said consumers should be able to call a lines company directly especially over issues like transmission faults. It could also push up costs for some of Empower's 1500 existing business customers. "We believe the lines company should run the faults service, not us," Mr Hawkin said.

But United's general manager for customer service, Mary Boettcher, said that since United - which was formerly called Power New Zealand - had sold its retail operations, it no longer had call centres for customers. Most of the 500,000 power consumers on the United power lines network in the North Island bought power from either TrustPower or Transalta, and they had their own call centres, she said.

But Empower chairman Grant Baker noted lines company Vector, which operates the central and southern Auckland power transmission business, had set up its own call centre for customers. Mr Baker confirmed Empower planned to provide a domestic electricity service, but he was unwilling to detail the company's marketing strategy for households because of commercial sensitivity.

However, some form of bundling arrangement with other services is on the cards, especially because Empower has links with a telecommunications reseller. Its executives also have experience with other retailing and finance companies. Empower already has close to 1,500 business customers on its books. On average those customers have saved 15 per cent on their power bills, with some cutting their bills by 40 per cent.

The company has an arrangement to purchase power in bulk from generator Contact Energy, which it then onsells to retail customers. Empower is the country's only power retailer that does not own its own generation assets.