Vector to re­turn $13.9m

Central Leader - - OUT & ABOUT - STAFF REPORTER

Vector will re­turn $13.9 mil­lion to con­sumers af­ter it ac­cepted it had taken more money from them than it was en­ti­tled to in 2014 and 2015.

But some cus­tomers may still be pay­ing more than they have to.

Un­der a set­tle­ment reached with the Com­merce Com­mis­sion, Vector has agreed to re­duce the amount of rev­enue it re­cov­ers over two years start­ing in April 2018.

The prob­lem hap­pened when it re­struc­tured its res­i­den­tial tar­iffs in April 2013, cre­at­ing’’low-user’’ and ‘‘stan­dard user’’ cus­tomers.

It as­sumed re­tail­ers would put all cus­tomers on to the right rate from the first day, an as­sump­tion the Com­mis­sion said was un­re­al­is­tic. As a re­sult, Vector col­lected more rev­enue than was al­lowed.

Vector was not able to switch con­sumers be­tween tar­iffs. In­stead, it fell to elec­tric­ity re­tail­ers to re­quest Vector switch con­sumers to the most ap­pro­pri­ate tar­iffs un­der the re­struc­tured prices. In set­ting prices for the two tar­iffs, Vector as­sumed that com­pe­ti­tion in the elec­tric­ity re­tail mar­ket would en­sure that vir­tu­ally all res­i­den­tial cus­tomers would be switched to the most ap­pro­pri­ate rate .

But at the end of the first year of the new price struc­ture, 28 per cent of Auck­land house­holds had still not been switched to the tar­iff ap­pro­pri­ate for them.


An es­ti­mated 80,000 Auck­land house­holds could still be over­pay­ing for their elec­tric­ity.

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