Here's what should happen if you lose your power prompt payment discount
Friday, 29 November 2019
Electricity customers who are upset about the prospect of losing prompt payment discounts may have misunderstood the intention of the initiative, Consumer NZ says.
Energy Minister Megan Woods has given power companies six months to reduce the penalties on customers who pay their bills late before the Government takes action.
She earlier said prompt payment discounts amounted to hidden late payment penalties.
But customers have expressed concern that the end of prompt payment discounts could mean higher bills for everyone.
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'There's confusion among customers around what losing the discount means,' said Consumer NZ head of research Jessica Wilson.
'What's intended is that everyone is entitled to that prompt payment discount price.
'You don't lose anything. There is a lot of confusion around what it potentially means. You should not see bills go up as a result.'
Price index for household electricity in New Zealand.
Meridian has already phased out the discounts and offered cheaper prices to more customers.
At Contact, chief customer officer Vena Crawley said it was removing its prompt payment discount, of anything from 10 and 24 per cent, for new customers.
'We've introduced a simpler product set which represents a fairer and more transparent energy market. We know some of our residential customers love our [discount] plans and the discounts they offer, so nothing changes for them unless they renew or change their plan, and new customers signing up can choose from our suite of products that offer different levels of benefits.
'Our new plans are available to everyone.'
Kevin Angland, Mercury's general manager of retail and digital, said customers told the company they valued the discount. It offers a 12 per cent reduction for prompt payment.
'The Minister of Energy has written to retailers requesting they ensure their prompt payment discounts are reflective of the cost of managing and recovering customer debt. Mercury is currently reviewing its prompt payment discount policy to ensure this is the case, this includes seeking independent external validation.'
Trustpower said it was also reviewing its discount.
The Electricity Price Review released by Woods last month estimated that consumers would be $45 million a year better off if power companies normalised pricing at the discounted level and only charged late-payers 'reasonable fees' for the costs of chasing late payments.
The Government is understood not to be convinced by concern that electricity companies might be more likely to average out their pricing at somewhere between the discounted and non-discounted level over time.