Mercury offered customer $320 credit to cancel switch on March 31

Tuesday, 26 May 2020

New Zealand's electricity industry rules have become so complicated that even large state-owned generators appear to be at risk of tripping up.

A second state-owned electricity company, Mercury Energy, has said it tried to 'win-back' customers on the same day that a government-backed ban relating to the practice came into force.

But unlike Genesis Energy which this month apologised for accidently breaching the win-back ban due to 'human error', Mercury believed it was on the right side of the rules.

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 decided on the ban 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.

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But state-owned power companies appear to have maintained the practice until right up to, and possibly after, the last possible minute.

The Electricity Authority said this month it was investigating 228 alleged breaches of the win-back code by Genesis, all but four of which had been self-reported by the company after a complaint from independent retailer Electric Kiwi.

Genesis spokeswoman Kiely Evans said that it had made an unfortunate 'human error' over the day the rule change came into force, thinking the ban on win-backs did not come into effect until a day later than it did, on April 1.

Mercury Energy said it had also tried to win-back customers on March 31.

An Auckland customer contacted Stuff and said that Mercury had called him that day to offer him a $320 credit if he cancelled a switch that he had made — coincidentally to Genesis — about three weeks' earlier.

Mercury spokesman Craig Dowling said its understanding of the rule change was that it barred retailers from trying to win-back customers who had switched to rivals after March 30, rather than from attempting win-backs after that date.

'We did make calls on March 31. These were all related to 'saves/win-backs' for customers where the process commenced prior to March 31.

'We feel we have been compliant with the Electricity Authority's directions,' Dowling said.

'We are engaging with them so they are aware of our approach.'

Electricity Authority spokeswoman Sally Taylor-Phillips said — when approached for comment on Mercury's situation — that, in addition to Genesis, the authority had received 'one other complaint about a retailer attempting win-backs after the rules changed'.

'Our compliance team is currently investigating this complaint and we are unable to provide further information at this stage of the process,' she said.