Aucklanders who fall behind with power bills from Mercury Energy are being told they will have to pay for power in advance unless they clear their debt.

The company, owned by state-owned Mighty River Power which the Government plans to float on the sharemarket after the election, has already moved 14,000 of its 270,000 Auckland customers on to a pre-pay system called "Glo-Bug".

Customers can top up their accounts by paying at least $20 at between 4000 and 5000 dairies. Their power is disconnected when the money runs out but the company does not charge a fee to put it back on again as soon as they top up their accounts.

Lynfield unemployment beneficiary Marianne Hepple said she often fell behind with her bill but was told for the first time last week that she would be moved compulsorily on to the pre-pay system if she did not pay her debt of $115.87 within seven days.


"It appears now that they have the right to force you on to it," she said.

"I don't want to go on to it. The way I do it now is I pay the bill late. With Glo-Bug, what happens if you find you haven't got any money today and your power stops?"

Ms Hepple, 48, worked for 14 years as an administrator with the Auckland Philharmonia, but has not been able to get a job since she had to stop work with breast cancer in 2001. She said she would pay her bill to avoid going on to the pre-pay system but she feared for others who would be forced on to it.

"I've heard so many bad things about it," she said.

TVNZ's Fair Go reported last year that Mercury originally did not charge a daily fixed rate for the service but introduced a fixed rate last year.

It also changed its meters from showing how much credit was left to a system showing a green light when customers are still at least $10 in credit, an orange light when the power was due to be disconnected the next day and a red light when it would be cut off at midday that day.

Mercury's head of credit for commercial and Glo-Bug, Luke Blincoe, said the company changed its policy last month to "include a statement about Glo-Bug earlier in our processes".

"As an energy provider in a competitive industry, we cannot 'force' customers to accept any specific product," he said.


"What we can do is exercise judgment over which customers we can responsibly extend credit to, as we don't believe it is in anyone's interests to allow customers to accrue large debt. As a result, in some cases we may limit our offer to pre-payment only.

"We would be disappointed if customers chose to move to another retailer, but we accept that is their right."