Plug pulled on discount power brand

By CHRIS DANIELS

The plug is being pulled on discount electricity brand First Electric, with its 25,000 customers soon to become signed up to Mercury Energy.

Both brands are owned by state-owned power generator and retailer Mighty River Power, which ran the First Electric brand as a cheaper alternative to its main Mercury brand.

First Electric's customers were supposed to get cheaper power, but have their meters read less often, every two or three months, and were not offered some other discounts.

However, the First Electric brand has not been promoted for some time and from December 1 will cease to exist.

General manager of retail for Mighty River Power, John Foote, said First Electric customers were paying around the same amount for their electricity anyway.

It had not been possible for retailers to offer the kind of cost savings customers expected in return for a drop in service.

"There was a mismatch between people's requirements for service and an expectation of discount."

First Electric's 25,000 customers will soon have their meters read every month, as all Mercury customers do.

Foote said 90 per cent of the cost to a customer was external, such as the price of buying the electricity and lines charges.

The dropping of the First Electric brand means Mercury bills will now arrive in letterboxes in parts of New Zealand unaccustomed to the sight of the wing-footed messenger.

Foote said there now would be a sizeable customer base in the Thames Valley, on the North Shore and Waitakere. New Mercury customers also would be found in the Manawatu, Taranaki and Taupo.

It was a sign that Mercury would be competing for customers outside its traditional areas of Auckland and Manukau cities.

"It's a lot easier to focus on one brand," said Foote. "That means you can save the costs of the extra brand and therefore develop more services and become more competitive."

First Electric's departure leaves Empower as one of the few remaining discount electricity brands. Empower, a fully owned subsidiary of Contact Energy, reads meters every second month and uses competitions and bonus payments to attract customers.