Vector to return $13.9m
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.