Power switchers dodge final bill

Contact Energy says the growing number of customers not paying their final bill when they switch to other power suppliers will make looming price increases even more painful.

The rate of switching - or churn - is running at record levels, meaning more customers are not paying their final account.

Contact's bad debts have almost doubled in the past six months.

In the half-year to December 31, the company wrote off $8 million compared with $5 million in the same period in 2008.

Managing director David Baldwin said all power companies faced the same problem.

"They're likely to repeat that offence with the next retailer. It is a problem that is growing, and a function of churn." Usually, 10 per cent of customers switched suppliers during a year but with intense competition this had grown to around 15 per cent.

It was boosted by the surge in customers abandoning Contact last year after lingering fallout from price rises and dissatisfaction with the running of the company, controlled by Australia's Origin Energy.

Switching peaked in November last year when 26,441 customers changed suppliers, up 5000 on a year earlier and double the figure of two years earlier.

Mr Baldwin said debt collectors and credit agencies were successful in many cases but in others, outstanding sums had to be written off.

The more mobile customers were, the more likely some were to steal electricity and not pay their bills.

"All those costs ultimately get passed on to everybody else. Someone has to pay for that."

This would be added to further price increases, which have already hit householders hard in the past decade.

He said it was inevitable there would be rises, to cover the cost of building more power stations.

Contact customers in Auckland face a 5 per cent increase from next month.

It is estimated the emissions trading scheme after July 1 could result in price increases of around $35 to $40 a year a customer.

Contact yesterday reported flat underlying earnings of $80.1 million for the past six months.