Empower brand stays, jobs go

By CHRIS DANIELS

Contact Energy is about to fold its budget Empower brand into the parent company, but the name will remain.

Empower - an electricity brand well known for its use of bonus payments, competitions and direct selling techniques - was bought by Contact for $23 million in 2000.

Since then it has operated with separate management and staff under an agreement which expires in June.

The Empower brand would stay, but the 30 Empower jobs would be made redundant, Contact chief executive Steve Barrett said yesterday.

Barrett said taking direct control of Empower would make no difference to the brand's 130,000 customers.

Contact is the last of the big power generator-retailers to maintain a "budget" brand for selling electricity.

Mercury Energy, owned by the state-owned Mighty River Power, also used to sell power under the "First Electric" brand.

When full retail competition for residential electricity supply was introduced there was a rush to sign up new customers.

Some thought that budget brands, which promised cheaper power but did not read the meter as often, would succeed against the high-price rivals.

It later turned out that the companies could not supply power at a substantially cheaper rate, and that many consumers did not mind paying extra for better service.

Empower's door-to-door sales methods attracted the ire of the Commerce Commission in 2001, when it admitted breaching the Fair Trading Act.

The breaches related to three occasions on which consumers were signed over to Empower without giving their permission.

One consumer thought she was agreeing to make a donation when she was in fact signing an authority to switch suppliers.

Another was told that her supplier had been taken over by Empower.

Empower was recently named as the company of choice by its rival Trustpower, which is pulling out of the Wellington and Christchurch residential markets.

The Tauranga-based generator-retailer is writing to these customers, suggesting that they switch to Empower.