Smart-meter anger in power market

New electricity market entrant Electric Kiwi is accusing Trustpower of dragging its feet with the introduction of smart meters, because it does not want to lose customers.

Nationwide, just over 78 per cent of households now have a smart meter. But while penetration is high in centres such as Auckland and Wellington, in parts of the country where Trustpower is dominant, few households have made the switch.

Smart meters record information at half-hourly intervals and send the information to the power company at least daily. It means readings are more accurate and the meter does not have to be physically read. Some new competitors, such as Flick and Electric Kiwi, require a smart meter if households want to take up their services.

Tauranga is one area where households have been slow to get smart meters, industry data shows.

There, Trustpower is dominant with more than 70 per cent of the market. But it has more than 37,000 legacy meters that have not been replaced by smart meters.

That is about the same number as across all the retailers in Auckland combined. Tauranga also has the lowest switching rate of the main centres – at just 15 per cent per year compared to more than 25 per cent in Hamilton.

Electric Kiwi chief executive Luke Blincoe said it meant Tauranga customers had fewer options.

‘‘The two leading new players, us and Flick, both require smart meters. The absence of smart meters on networks reduces the amount of competition,’’ Blincoe said.

One customer, Aimee Ansell, said she wanted to move from Trustpower to Electric Kiwi but had been told she would need to pay $150 to have a smart meter installed if she wanted to do so.

‘‘I feel I’m paying higher rates than other providers. I’m quite keen to switch suppliers but all the pricing is going up in April for the big companies, so there really are limited options of who I can switch to since I’ve got an old Trustpower-owned meter that’s inside my house,’’ she said.

Blincoe said it was in the interests of the market leaders to maintain their share by not deploying smart meters rapidly.

Flick chief executive Steve O’connor said Tauranga was an ‘‘interesting’’ situation.

‘‘That’s a decent-sized city with a low proportion of smart meters. Trustpower is dominant. Is that a corporate defensive strategy?’’

He said it was the only urban area that looked to be working against the trend. ‘‘No one else wants to go in deploying smart meters because Trustpower has most of the customers.’’

Trustpower spokesman Matt James agreed the company had not focused on moving customers to smart meters in the same way other retailers had.

He said Trustpower was in a different situation because it had historically owned power meters as well, and had 75 staff employed as meter readers, so it saved on some of the costs that other companies were trying to avoid by moving to smart meters.

‘‘We have been really happy with legacy meters and readings as a service to customers.’’

But he said things were now changing. Many of the customers who switched to the company from other retailers had smart meters. Now, Trustpower was thinking about what service it could provide its customers by using them.

He said the decision to wait was not designed to protect Trustpower’s market share.

Trustpower has a significant number of legacy meters in Nelson and Marlborough, too.

Contact has the next highest number of legacy meters in the market, with just under 65,000 across New Zealand.

Consumer NZ chief executive Sue Chetwin said customers who struck problems could switch to a provider who was proactively installing smart meters.

Mercury said, when customers joined it who did not have smart meters, they were added to its schedule for an upgrade. Contact is also rolling them out nationwide, including in Tauranga.

The Commerce Commission said the issue had not been raised with it.

‘‘The commission would only be involved if there was evidence that energy retailers were colluding in any way in breach of the Commerce Act.’’

Electricity Authority chief executive Carl Hansen said he was happy progress on smart meters.

‘‘Several other countries have experienced significant delays in their rollouts – for example the UK and most states in Australia – due to their regulators or government departments mandating their rollouts.

‘‘This has led to substantial additional charges in some jurisdictions. In contrast, the rollout in New Zealand has been driven by competing retailers seeking to deliver better services to their customers for no extra charge.’’