KEY POINTS:
Electricity retailers will operate under new guidelines for dealing with people who have trouble paying their bills and there is the threat of regulation if the guidelines aren't followed.
Prime Minister Helen Clark said the Electricity Commission was preparing the guidelines and establishing a monitoring regime to ensure power companies implemented them.
Under the guidelines, electricity companies must:
* advise consumers having difficulty paying their bills about the assistance available from government agencies and community services;
* identify consumers who are having difficulty paying their bills and consult with the Ministry of Social Development before power is disconnected. At no time during this process should a "vulnerable" consumer's power be cut off;
* not disconnect power to any customer identified as being reliant on electricity for medical equipment to maintain life.
Miss Clark said last week that Mercury Energy's decision to disconnect power to Folole Muliaga's house when she needed an oxygen machine to help her breathe required a response from the Government.
Mrs Muliaga, a 44-year-old mother, died less than three hours after a contractor cut off the power to her home.
Mercury Energy ordered the power to be cut because of an overdue power bill of $168.40.
Miss Clark said previously that existing guidelines told power companies they should tell people about assistance that was available to help them pay bills before electricity was disconnected.
Today, she told reporters the new guidelines would be "much stronger" in wording.
"We're moving from 'should' to 'must' and 'will be required to'," she said.
There was the "threat of regulation" if companies ignored the guidelines.
The Electricity Commission would spend a month consulting with the affected organisations about the impact of the changes. Electricity retailers would then have three months to introduce new procedures and start complying with the guidelines.
Three months after the guidelines were introduced, the Electricity Commission would monitor compliance, survey practices, observe the number of disconnections and would report to Cabinet by the end of February 2008.
If there was insufficient compliance, "we will move to regulate".
The Government could not regulate under existing legislation but would amend the Electricity Act to make such regulation possible.
However, the Electricity Commission had reported electricity retailers had taken on board the "sad lessons" of the past couple of weeks and the Government was expecting retailers to co-operate.
"I think every retailer has learnt from this," Miss Clark said.
"What's happened over the last couple of weeks has been a huge wake-up call and for those who don't have good practices they will be scurrying to put them in place."
On top of the monitoring by the Electricity Commission, Miss Clark expected "alert" community agencies to also report if retailers did not observe the guidelines.
She hoped there would be a fall in the number of power disconnections.
Measures Contact Energy had taken to improve communications with consumers had resulted in a fall in the number of disconnections and it was targeting a further fall.
"That shows what you can achieve with a lot of goodwill."
Welfare authorities have said they deal with about 32,000 families a year who can't pay their power bills.
Miss Clark also said today that State-Owned Enterprises Minister Trevor Mallard had been asked to report on whether SOEs were fulfilling their social responsibility requirements.
A spokesman for Mercury Energy said it would work with the Electricity Commission on the design and implementation of the new guidelines and would introduce the changes as soon as possible.
- NZPA
