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Home / New Zealand

<i>Brian Rudman:</i> Message the power companies can't seem to understand

Brian Rudman
By Brian Rudman,
Columnist·
7 Jun, 2007 05:00 PM4 mins to read

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Brian Rudman
Opinion by Brian Rudman
Brian Rudman is a NZ Herald feature writer and columnist.
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KEY POINTS:

Folole Muliaga was hardly in her grave before electricity retailers were up on their hind legs whining about Government threats to regulate their industry to prevent another tragic death.

Meridian Energy spokesman Alan Seay said: "It's all very well saying the power company has to advise the consumer
[of impending disconnection], but it's really difficult if consumers are hard to contact."

His Genesis Power counterpart, Richard Gordon asked: "Are we meant to go sniffing around people's homes to work out whether they're vulnerable?"

The simple answer to Mr Gordon's question is "yes, you are". As for Mr Seay, he should try harder. Hasn't he got the message from the Muliaga tragedy that an automated message to a telephone that had been disconnected is just not good enough.

Nor is the fact that the Ministry of Social Development deals with 32,000 cases a year of people who either have or are about to be disconnected.

Eighteen months ago, the big electricity retailers agreed to guidelines to "ensure that minimal disconnections" occurred among their low income customers. Obviously, leaving such reforms to the tender heart of the market has not worked.

Electricity is a necessity of life in the modern world, and the state-owned power providers need to have this etched into their operating charters. That they continue to fight this truism only underlines the need for the regulations Prime Minister Helen Clark has signalled.

It's interesting that Mr Seay, who is complaining about the difficulties of contacting at-risk customers, was a member of the group set up by the Electricity Commission in late 2005 to develop a protocol between power retailers and social agencies.

The first objective of this protocol was "to reduce the number of avoidable disconnections through communication between retailers and social agencies." The second objective was "to ensure low income consumers have access to information and tools to assist them in managing their electricity costs."

These protocols and the December 2005 Electricity Commission's "Guideline on arrangements to assist low income domestic consumers" were the result of an October 2004 Government policy statement.

They introduced regulations for low fixed charges for low use consumers, and called on the Electricity Commission to development arrangements "to ensure that consumers who may have difficulty paying their bills on time have access to electricity ... "

Consumers in strife were to be directed to budgeting advice and be relieved of the costs of frequent disconnections and reconnections.

The big shortcoming in both the guideline and the protocols is their reliance on the goodwill of the industry and the expectation that if the halt and the lame and the poverty stricken don't come leaping out of the woodwork in response to automated phone calls and threatening letters they deserve what they get.

Once a "vulnerable consumer" asks for help, the protocols and the guidelines ( www.electricitycommission.govt.nz) seem helpful.

The guidelines also recommend "retailers make reasonable efforts to contact consumers before disconnection takes place" but the authors managed to come up with only two ways of doing that.

One was to telephone the customer "outside normal working hours", the other was to call customers on their mobile phones. No one came up with the idea of dropping around to the house. Except that is, to pull the plug.

Mr Gordon is horrified that being forced to send staff to make contact with those about to be disconnected, would bring "a new cost structure that will have to be recovered, impacting electricity prices".

Therein lies the problem with voluntary guidelines. However noble the pledges of concern, in a competitive situation the struggling customer is always going to come second to the size of the profit, the managers and directors can deliver to their grateful owner.

The grateful owner is now also a very embarrassed owner. Not so much by the isolated death of one unfortunate customer, I hope, but by the hundreds of disconnections a month that have been flushed out into the open by this sad case.

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