Genesis Energy admits hundreds of breaches of 'win-back' ban

Tuesday, 19 May 2020

Genesis will be known to many Kiwis as the owner of the Huntly coal and gas power station.

State-owned power company Genesis Energy has admitted accidently breaking a rule that prevents electricity retailers from trying to 'win back' customers from rival retailers, on the first day the rule came into force.

The Electricity Code was amended on March 31 to bar electricity retailers from trying to win back customers who switched to a rival, until 180 days after the customer had switched.

The Government decide to ban win-backs in the wake of analysis that suggested Kiwis might be paying a $400 million 'loyalty tax' because large power companies could afford to take customers for granted and wait for them to jump ship before offering them a competitive price.

The Electricity Authority said Genesis had advised it that on March 31 — the first day of the new regime — it had tried to win back 224 customers who had switched to 20 different power companies.

Twenty-five of those attempts were successful, the authority said.

* Plan to stop power companies trying to win back customers

Genesis spokeswoman Kiely Evans said that it had made an unfortunate 'human error' over the day the rule change came into force, thinking the new rule did not come into effect until April 1.

'We are very sorry this has happened,' she said.

'We had adapted our internal processes and systems in preparation for the code change months out and our intention has and remains to comply fully with the code as we know how important this is.'

The Electricity Authority said it was also investigating an additional four alleged attempted win-backs on and after March 31 which were reported by Electric Kiwi but which Genesis had not disclosed.

'With regard to the additional alleged breaches, we are currently working through the information provided by the authority,' Evans said.

'At this point it is not clear whether these cases are in fact breaches.'

The authority said Genesis reported its win-back attempts after Flick Electric complained to the authority that on March 31 Genesis had called a former Genesis customer, who had switched to Flick eight days earlier, to offer them a lower price.

'The customer declined the offer made by Genesis and reported the attempted winback to Flick,' the authority said.

The Electricity Authority also said on Tuesday that it had approved a rule change it had proposed in the wake of Covid-19 that will give some retailers an extra 60 days — instead of the usual 30 days —to settle their debts with the country's six largest lines companies.

Retailers will qualify for the delayed payment terms if they are facing 'liquidity problems' and might exit the market due to the consequences of the Covid-19 pandemic, but are otherwise financially sound

Electricity Networks Association chief executive Graeme Peters had strongly criticised the proposal, saying help for struggling small electricity retailers should not come at the expense of the 27 lines companies that it represents.