Power to the people as Kiwis profit from switching providers

Photo / Mark Mitchell

One in five Auckland households switched power companies last year, helping them save an average of $136 in the process.

The Electricity Authority's annual review of the industry's performance showed that 385,000 households changed their electricity provider in 2014 using Government-sponsored tools. That was fewer than the previous year, when 396,000 consumers changed companies.

The review by Government's electricity regulator said the biggest savings were made in Bay of Plenty, where people changing providers saved an average of $318.

Households on the East Coast were most likely to switch companies - nearly a third moved to another retailer in 2014.

The review said growth of electricity brands - including a record-high 27 retailers - had fostered the high rates of company-switching. Aucklanders had the most choice with 21 companies, four of which had joined the market in the past year.

Electricity Authority chief executive Carl Hansen said Auckland was the fourth most active region, with 107,470 households changing providers last year.

Energy Minister Simon Bridges said it was encouraging to see more New Zealanders moving to small and medium retailers, which now made up 23 per cent of the market.

The authority said prices had risen more slowly than retailers' costs, which suggested that competitive pressure was limiting price rises.

However, prices still increased last year despite the more competitive market. Statistics New Zealand figures showed power prices rose 3.6 per cent - more than three times the rate of inflation.

Mr Bridges said there was always more work to do.

"Competition is the best way to keep downward pressure on prices, and this Government will continue to pursue policies that enhance competition in the electricity market," he said. Electricity price rises have since flattened out.

In the last quarter, Statistics New Zealand said there was zero change - the lowest annual change since 2001.

The authority said power companies' innovative ideas had also contributed to the rates of switching, and cited several examples.

Trustpower was now offering bundled electricity, gas, phone and internet, with price freezes on gas and power.

Small retailer Flick Electric Co was passing spot wholesale prices on to consumers. And Genesis Energy had stopped door-to-door marketing because most of its customers said they did not want salespeople coming to their home.

A survey by the authority found half of consumers were approached by their electricity company when they planned to switch, and were offered credits of up to $150 to stay.

The Government's main tools for encouraging competition were Consumer New Zealand's Powerswitch website and the Electricity Authority's What's My Number site.