Power struggle for customers

By CHRIS DANIELS consumer reporter

Rival power companies are gearing up to lure customers fleeing On Energy because of rising winter electricity prices.

On Energy, the largest power retailer, announced a price rise on Friday, blaming high wholesale prices.

Alan Seay, a spokesman for competing retailer Meridian, said the company had been inundated with requests from On Energy consumers wanting to leave.

The Meridian call centre had hired 30 more staff to cope with the extra calls from people wanting to leave On Energy, he said.

Meridian received about 1000 calls on a normal day, but 8000 were logged yesterday.

On Energy said an average household would pay 50c a day more for power.

In full-page newspaper advertisements yesterday, managing director John Barton said wholesale prices were too high. He promised to drop retail rates when there was a "significant reduction" in wholesale prices.

Energy Minister Pete Hodgson has criticised On Energy for not arranging enough "hedge" contracts to ride out high prices caused by low hydro-lake levels and the arrival of cold weather.

He has asked the company "to explain how it got itself into winter with what is apparently an inadequate level of hedge cover against high spot-market prices."

Meridian, which is a big power generator, says it is not planning any across-the-board price rises this winter.

Mr Seay said the switching of customers was now running smoothly, but there could still be delays.

"Customers should expect to be switched within six weeks.

"People do need to be patient.""

On Energy spokesman Bruce Thompson said the company had a good relationship with its customers and it hoped they would realise the reasons behind the price rise.

"We hope that most of our customers will stick with us, but at the end of the day it is customer choice.

"As long as they know we've acted fairly it's their call."

The price rise could be offset by saving only a small amount of electricity.

One company that is evenly balanced between generating electricity and selling it to customers is Mighty River Power.

Retail manager John Foote said Mighty River, which sells power under the brand names Mercury and First Electric, had no plans to increase prices for existing customers.

He said there had not yet been a surge in On Energy customers wanting to switch.