Genesis has labelled Meridian's statements regarding prompt payment discounts ''unhelpful'', in a sign of intense pressure felt by power companies facing a pricing review and locked in a heated battle for customers.

Genesis chief executive Marc England said the best way to help vulnerable customers - one focus of the review of the electricity sector - could be a collaborative industry approach.

''Collectively, we need to put help where help is needed most at the same time as we allow genuine and sustainable competition to deliver benefits of choice and innovation to consumers,'' England said.

Meridian says it is taking away prompt payment discounts but also eliminating penalties for about 8000 of its customers who were penalised for paying their bills late.

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The company's chief executive Neal Barclay has said the outdated system was one of the industry's ''dirty secrets'' and needed to go.

The company says consumers could save $40 million by not paying penalties. He has said the move by his company was costing it about $5 million, suggesting others have more to lose if they follow suit.

But England said although it was fine for Meridian to change its pricing structure, to suggest the wider competitive market adopt it in the middle of a regulatory process was a distraction from the issue at hand.

''We're not averse to removing the prompt payment discounts and like others we've looked at it but the electricity pricing review is tasked with coming up with solutions that support the truly vulnerable," England said.

''We're in a competitive market and different companies will offer different things - we're against Meridian seeking to create competitive advantage through this by talking about this in the media.''

Genesis also says Meridian fees - such as a $5 charge for sending late payment reminder notices - were a sign the company was ''giving with one hand and taking with the other''.

A preliminary report found that up to 175,000 households could be facing energy hardship and this is worrying power companies ahead of the final recommendations on electricity pricing are made to the Government in May.

England said Genesis took the issues faced by vulnerable customers very seriously.

Genesis already had a vulnerable customer care package which includes 55,000 customers paying with control-a-bill and connection for customers with lower credit scores or those who have been referred to it through social agencies.

He said his company allowed customers to open accounts with lower credit scores than other companies.

Mercury Energy and Contact Energy have also rejected Meridian's approach, saying there were better ways of helping needy customers.