Power customers cut off by companies 'without the right to do so'
Tuesday, 3 November 2020
Consumers are being disconnected by power companies that do not have a contractual right to do so, the Electricity Authority says.
Consultations have begun on new electricity industry-wide “customer care guidelines” after evidence emerged that vulnerable customers, including those medically dependent on continued electricity supply, were at risk of having their electricity cut off.
The Electricity Authority was concerned the 2009 guidelines brought in after the 2008 death of Auckland woman Folole Muliaga, were being applied inconsistently by power companies.
In workshops held by the authority, power companies told it there were inconsistencies in how retailers provided support to customers, which were hard for consumers and their advocates to understand, and that: “retailers’ policies and processes can make or break their customers – especially those facing payment difficulties”.
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Muliaga, who relied on an electricity-powered oxygen machine, died after power was cut off by Mercury Energy over an unpaid bill.
Her death shocked the country, and prime minister Helen Clark was among mourners at her funeral.
Data from the authority shows that in recent three-month periods, between 4000 and 8000 disconnections took place, down from over 10,000 in 2013, and in the period from 2006 to 2007.
The Electricity Authority consultation paper said that since vulnerable customer and medically dependent customer (MDC) guidelines were introduced, the number of electricity retailers had increased threefold.
The system was not working as well as it should, the authority found, and many power companies did not have the expertise to work out whether a customer really was medically-dependent on continued power supply.
Some retailers also felt that some households were using “loopholes” in the guidelines to delay or avoid paying their power bills.
And households with a medically dependent family member did not have a clear process to follow if a power company did not agree they were an MDC household.
It also emerged that some families with a medically dependent person in them had been recommended to have a pre-pay account by electricity companies. The proposed code would ban power companies from making such recommendations.
“If a customer, or a consumer usually resident at a customer’s premises is an MDC, retailers should not proactively recommend a prepayment meter,” the proposed code would say.
“However, to avoid discriminating against MDCs, retailers may agree to install a prepayment meter at the premises of an MDC, if requested to do so by the customer at the premises.”
But prepay accounts ran the risk of households being effectively without power, if they ran out of money, and the proposed code says: “The retailer should suggest the MDC first discusses the prepayment meter option with their Health Practitioner. The retailer should also make sure the customer understands the risks of receiving no electricity supply if the prepayment meter runs out of credit.”
The Electricity Authority is also proposing that every power company should publish a public-facing consumer care policy, and become better at referring all customers struggling to pay their bills to support agencies, not just those tagged as vulnerable or medically-dependent.
This would help customer advocates, including budgeting services, to be able to help struggling households, the authority said.
The proposed code would put a greater onus on power companies to train their staff to recognise signs of pending or actual payment difficulties.
The proposed code was “soft regulation” as adherence to it would be voluntary.
The consultation on the proposed code closes on November 27.