Plan offers more buzz for buck

Power bill rebates are due for 35,000 Mercury Energy electricity customers as part of a new plan to give power users more buzz for their buck.

Rebates will not be large - an average of $12 a customer - but Mercury says it is the first to offer money back to people paying too much for their power.

Mercury, the retail arm of the state-owned Mighty River Power, pitches itself not as the cheapest power company but the one offering the best service, with more meter reading and better billing information.

From next month, it will start automatically matching its consumers with the best-value pricing plan for them and pay a rebate for the previous 12 months.

Customers can still choose not to change, but Mercury says the new policy will increase transparency and fairness, moving the onus on choosing the best price plan from the customer to the retailer.

About 70 per cent of Mercury's 300,000 residential customers are on its "low user plan" - but that could be the wrong one, says the company, especially if a consumer started using more power recently.

Mercury is the dominant power retailer in Auckland City and Manukau City. The other big power companies - Genesis, Meridian, Contact and TrustPower - have similar "home" bases.

Exactly how much competition there is in the residential electricity market has been exercising the minds of regulators at the Commerce Commission lately.

It is investigating whether there might be any kind of restrictive trade practices operating.

Commission general manager Geoff Thorn told a power conference in Auckland this week that he expected substantial progress on the inquiry by the middle of this year.

Power companies often point to constraints on the national power grid as being partly responsible for their settling into "incumbency" areas, dominated by just one company.

A tightness in the supply of new power generation is also often cited as behind a lack of customers switching power companies.

The commission is also looking into how power companies advertise their prices to consumers. Thorn said there were seven "open investigations" into price representations.

Mercury spokesman Neil Williams said although the public might not see high-profile advertising campaigns from rival power companies, since much of the marketing was done through direct marketing, targeting individual customers.

Genesis, also state-owned, is running a direct marketing campaign in the Mercury area, trying to use Mercury's recent power price rises as a way of snaring new customers.