Electricity users pay extra for 'unfair' schemes

It costs more, there are no rewards for prompt payments and there's even a chance that you might not get it when you need it most.

Prepay electricity meters are "perhaps unfair" but are used by power companies to control the risk of bad debtors, the independent group Consumer says.

Energy analyst and consumer advocate Molly Melhuish said prepay was "not a good deal" as the cost of such risk was passed to the customer.

Power companies say the system has advantages to those needing to control their power usage, and it does not require the payment of a bond or the signing of a contract.

Estimated figures from the consumer website, Powerswitch, show that although prepay power users in Auckland and Wellington spend about 15 per cent more, most major power companies have customers who prefer to use the pay-as-you-go schemes.

Among those is Eseta Folomia, who lives with her husband and six children in a three-bedroom state house in Mangere.

Mrs Folomia said her family ran up a debt with Mercury Energy, which suggested the prepay system to maintain power in their home and pay off the outstanding balance at the same time. The family, who have no source of heating and share beds to stay warm, normally pay about $40 a week for power.

Consumer NZ chief executive Sue Chetwin said prepay was likely to be used by the most vulnerable and disadvantaged groups.

Despite Genesis Energy's problems last weekend, where several prepay users went without power in freezing conditions, she said there were still benefits in the pay-as-you-go method.

"Electricity companies don't have to take on customers so they are worth it because they allow people who are basically bad debtors to have power."

Molly Melhuish said prepay customers were paying about a dollar a day to avoid being disconnected.

Genesis Energy spokesman Richard Gordon said its 10,000 prepay customers had control over their daily power consumption. They were not required to sign a contract or pay a bond.

Mercury Energy spokeswoman Marie Hosking said 10,000 people used its Glo-Bug prepay system available only in Auckland.