Powershop gains from customer switching

Mercury Energy is the biggest loser for the month, shedding 3008 customers. Photo / Mark Mitchell

A power company minnow has emerged as a big winner in the latest customer-switching figures, while a heavyweight has staunched the outflow of customers by aggressive discounting, costing it up to $14 million a year.

Meridian Energy subsidiary Powershop says it added 1927 new accounts in August, a 5.4 per cent increase in its total customer base.

Contact Energy, which had lost more than 15,000 customers in the preceding two months, was able to cut the loss to 413 as its 22 per cent prompt payment online discount was heavily promoted.

Mighty River Power's Mercury Energy is the biggest loser for the month, shedding 3008 customers, according to the Electricity Authority figures.

Mighty River's general manager of retail and corporate affairs, James Munro, said that in the previous two years the company had experienced strong retail growth, ahead of new generation coming on board and the past year had seen customer numbers settle back to just under 400,000.

While it lost customers in the past financial year, sales volumes held, with residential sales up 1.5 per cent on the previous financial year.

"Our focus is on managing our customer base for value - this means higher-consumption customers and more effectively managing credit issues."

Powershop chief executive Ari Sargent said the August figures showed customers were switching at a high rate. More than 41,700 customers changed their supplier during August, up from 30,000 in August last year.

The highly successful "What's my number?" government-funded switching campaign has been running since June.

Sargent said there had been a long-held belief in the electricity industry that customers did not want to engage with either their power usage or power company. That had meant many electricity retailers felt they could keep pushing up prices every year.

"We've found this is nonsense. Not only do customers want to better control their electricity consumption, but also when they do know how much power they are using, they often use less and save money."

Contact's general manager of retail, Ruth Bound, said that in addition to retaining more existing customers, the company was acquiring new ones.

At its full-year result last month, Contact said the "Online, OnTime" discount scheme would cost it about 3 per cent of full-year residential customer revenue.