Competing comparison sites object to recommended funding for Powerswitch

Wednesday, 6 March 2019

A competing comparison website says it is unfair the Electricity Price Review is throwing its weight behind Consumer NZ-run Powerswitch, without canvassing the other options available in the market.

The Electricity Pricing Review identified that there was a two-tier market in New Zealand – those who shopped around and switched providers were getting a better deal on their household electricity than those who were loyal to a retailer.

It suggested it should be made easier for consumers to compare offers and switch.

Its options paper recommended merging price comparison websites Powerswitch and Whatsmynumber, and focusing on improving the new website's performance.

* Loyal electricity customers short-changed

* Fixed-price power a 'one-way bet'**

Glimp wants it recognised that there are more options than Whatsmynumber or Powerswitch.

The Electricity Authority spends $2.5 million a year on Whatsmynumber as well as on supporting Powerswitch.

The review panel said that money would be better spent on a single website that was easier to navigate, better at identifying the best deal for individual consumers and offered real-time access to each consumer's usage data.

'Although it's generally regarded the Electricity Authority-run Whatsmynumber is effective at raising awareness of retail competition, only the Consumer NZ-run Powerswitch provides price comparison functions. So under this option, the various functions would be merged into an enhanced Powerswitch website, which the Electricity Authority would contract Consumer NZ to run. Periodic retendering would ensure the service remained efficient.'

But Michael Speight, of Glimp, which also offers power price comparison, said public funding should not simply be directed to Powerswitch,

'Any such funding should be contestable to encourage innovation. We intend to make a submission on the options paper to that effect.'

Consumer NZ chief executive Sue Chetwin was a member of the expert advisory panel for the review.

He said he did not object to Chetwin being on the panel that made the recommendation.

'We trust the panel observed appropriate conflict of interest protocols before it decided to support the Electricity Authority spending $2.5m with Consumer NZ.'

Consumer NZ referred questions to the Electricity Price Review.

Melissa Idiens, project lead for the Electricity Price Review secretariat, said the potential conflict was managed in several ways.

'Sue Chetwin's participation in the review panel's consideration of this issue was intentionally limited: She reiterated the potential conflict at the start of the panel meeting that discussed this option and offered to leave the room. The panel asked her to stay so she could answer any technical questions panel members asked her regarding Powerswitch's functions, but otherwise she did not participate in the discussion and was not a decision-maker. '

She said it was still possible submissions would suggest the funding should go out to a broader tender to find a different preferred service provider.