Customers cautious in switching supply

By Richard Braddell

WELLINGTON - Sixty per cent of electricity users have a choice of their supplier, but only 5 per cent have taken advantage of the lower prices possible, says the Ministry of Commerce.

It says in a report that more than 30,000 customers switched electricity supplier in the six months to September and some estimates put the number as high as 50,000.

The report recognised that procedural difficulties, including getting meters read, were obstacles to smooth development of the market.

While the ministry found no examples of "unavoidable" switching costs being passed on to customers, it said many of the lines companies had not reduced their charges despite no longer providing services such as metering, billing and call-centre operations.

Anecdotes also abounded about problems or allegations of anti- competitive conduct by power retailers when they lost customers.

"We have heard allegations of, for example, competitive bids by retailers when they are told by an entrant that they are about to lose a consumer. Administrative delays by the former retailer improve its revenue and profitability," the report said.

"There are also claims that retailers are not informed by the entrant that they have lost a customer until they are told by the consumer when the next bill is sent."

While there were concerns about process and contractual issues, many of them were transitional and likely to be resolved.