Marlborough Express - Weekend Express
Power company rules need ‘beefing up’
The country’s electricity regulator risks sending the wrong signal to power companies by suggesting some existing guidelines designed to protect consumers could be made mandatory while leaving others voluntary, says an advocacy group that champions consumer interests.
A proposal released by the Electricity Authority on Monday last week would leave it up to power firms whether they ensured people signing up to power plans had good enough information to make informed decisions.
An expectation that electricity retailers set fees and bonds at a level that reflected their “reasonable costs” would also remain voluntary under what it described as its “initial preferred option”.
The Electricity Authority (EA) decided to review its Consumer Care Guidelines after finding in May that compliance with its terms by power firms had been patchy since it was introduced in 2021.
Changes proposed by the EA could require power firms to follow the code’s instructions in regard to how they dealt with customers who were having trouble paying their bills, disconnecting customers, and dealing with people who were medically reliant on power.
However, in a compromise intended to avoid imposing extra costs on power firms, its initial preferred option would leave as voluntary how they handled customer information, the information they need to provide when signing up customers, and their responsibilities in relation to fees and bonds.
Consumer Advocacy Council chairperson Deborah Hart said that while it was good the EA was consulting on the guidelines, the EA’s initial preferred approach risked sending the wrong signal to electricity providers by making some parts of the code seem unimportant. The council was established by the Government to advocate on behalf of consumers and small businesses in the power market.
The code should be both beefed up and made fully mandatory, Hart said.
Electricity retailers should be required to display their “best price offer” on consumers’ bills, so consumers knew if they were paying higher rates than they needed to, she said.
Consumer NZ warned in 2020 that unadvertised discounts offered over the phone by some electricity companies were dulling competition by making it harder for consumers to shop around and make sure they the best deal.
Hart suggested the code should also be aligned with protections in the United Kingdom, where firms are banned from disconnecting the elderly and disabled during winter, and should follow Australia in providing protections for people who were subject to family violence.
The concern the EA had expressed about mandatory consumer protections pushing up the price of power were misplaced given profits in the industry, she said.
“Electricity retailers have just posted enormous profits. There is not an argument to say that they cannot afford minimum consumer protections.”
The EA said the guidelines, “regardless of whether they are mandated or not, should be followed by electricity retailers”.