Working Kiwis left in cold by power changes

As Jack Frost flashes his fangs and winter starts to bite, is your power bill starting to sting? For years, I’ve been an incorrigible power shopper, hunting down the sharpest deals and sweetest incentives to help defang the spectre of price increases.

Since 2010, I have switched power suppliers eight times, including some boomerang returns to the existing supplier on the swift seduction of a win-back deal, to keep my monthly bill in check.

In May, I was paying only 16 per cent more for power than I was 10 years earlier – a lower rise than a decade of consumer inflation which totalled 18 per cent.

In stark contrast, my council rates bill spiralled by 86 per cent over the corresponding period.

But like me, if you’re a proactive power consumer staking out the best deals, you’ll have noticed that the spirit of retail competition has been stifled. Many of the sweeteners previously deployed to win you over are being steadily wiped out.

Last month, I was a little miffed to discover my ‘‘valued customer bonus’’, which sliced a further 10 per cent off my monthly bill in addition to the 10 per cent prompt payment discount, had been expunged from my account.

I promptly called my supplier and the customer service agent informed me in a comically snarky tone that ‘‘the company has moved to comply with the desires of the Government’’.

Despite my bill effectively rocketing 20 per cent due to the sudden axing of those two incentives, I noticed that the power supplier had not lowered its usage tariffs to offset the impact. So, I was off like a robber’s dog, switching to a new supplier with sharper-priced tariffs and a $200 ‘‘welcome credit’’.

Just as prompt payment discounts are destined for oblivion, so are win-back credits, which previously gave a power supplier the opportunity to woo back a defecting customer with sweeter incentives to stay. Not any longer.

As you may recall, in October last year, the Government’s 13-month-long Electricity Price Review issued its final recommendations, which Energy Minister Megan Woods eagerly embraced. They included prohibiting prompt payment discounts, win-back deals and a multitude of other competitive tactics.

At the time, Woods claimed that the state of the retail market ‘‘isn’t fair on power users who don’t shop around or don’t have internet access’’. How’s that for a chilling effect on competition – clobber the proactive and molly-coddle the idle.

It was a risibly unconvincing excuse for intervening and abolishing the arsenal of competitive pricing tactics. If power companies didn’t voluntarily comply, the minister warned she’d regulate six months later.

Fast-forward to today and Woods tells me her officials are monitoring the industry’s progress. ‘‘Regulation remains an option. It’s important to remember that people who previously received the discounts don’t pay more when the PPD is removed – it’s about offering fair prices to all customers,’’ she argues.

Nonsense – today’s headline tariffs haven’t substantially shifted to compensate for stripping consumers of the 20 per cent prompt payment discounts they were happily bagging.

Meanwhile, Woods confirms that win-backs have now been prohibited by the Electricity Authority, arguing that ‘‘banning them promotes competition by encouraging electricity retailers to offer lower rates across the board, not just when they lose a customer’’.

In my first-hand case, just two weeks ago, her theory unfolded as pure Narnia.

Woods also confirms that legislation is being drafted that will give the Electricity Authority an explicit consumer protection function, ‘‘ensuring they can regulate how distributors support or participate in competitive electricity markets’’.

Perhaps it would be a prime opportunity to take aim at the 27 lines companies that operate in New Zealand.

It’s as profligate as the absurdity of having 20 district health boards, with the ensuing exorbitant overheads.

But back to hobbling the spirit of competition in the retail power market. Beneficiaries and superannuitants have been bolstered with a doubling in their winter energy payments this year, substantially blunting their power bills. But what about working Kiwis?

They’ve been left out in the cold, with diminishing shop-around sweeteners to flatten power bills, snuffed out by needlessly busybody government decree.

In my firsthand case, just two weeks ago, her theory unfolded as pure Narnia.