'Distraught, heartbroken' energyclubnz bows out of retail electricity market

Monday, 22 June 2020

Energyclubnz founder David Goadby, left, said it was a tough decision to leave the retail market.

Energy retailer energyclubnz is leaving the New Zealand energy retail market and its 11,600 customers’ energy supply will be switched to Contact Energy.

It launched in 2017, offering customers access to wholesale electricity rates, with a 'member fee' charged on top.

It was previously part-owned by Stuff NZ, publisher of Stuff, but chief executive Sinead Boucher said last month it had sold its shareholding.

Founder and chief executive David Goadby said it was a tough decision to leave the market but he felt it was not being sufficiently regulated by the Electricity Authority. Its model relied on predictable wholesale pricing.

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“We've had a great three years and I'm very proud of what we've achieved: we’ve been one of the fastest growing energy retailers in New Zealand across the last three years and have seen our revenue go from zero to $20 million in that time. A huge thank you to everyone who has supported us, and to the fantastic team of people who helped make it happen.”

But he said the market was flawed and progress too slow. Wholesale prices have been volatile in recent years. Little action had been taken on last year's Electricity Price Review, he said.

“We'd got to the stage where we've had very little confidence in the Electricity Authority to deliver any changes.”

He said energyclubnz faced a choice of trying to raise money to invest, hoping it could deliver what customers expected, or bowing out.

“As a consequence of that, we approached Contact. We are technically still a participant but we are exiting all client and wholesale positions and the plan is to close the company across the coming weeks.

“If you look at the speed of the [Electricity Authority's] reaction to major issues, it's just non-existent.

“Covid-19 has made it harder for families to settle their electricity bills. If you look at the solution put in place for increased debt in the electricity industry it involves the six largest networks deferring debt on behalf of the industry. That makes absolutely no sense.

“I've put a lot of passion in but I had to get to the decision – would anyone in their right mind invest in the electricity industry in its current state? I've taken the decision to say I'm going to exit.

'We are distraught, heartbroken.'

The Electricity Authority has been approached for comment.

He did not disclose how much Contact paid to take over its customer base.

“We’ve found them to be customer-focused, fair, straight up and easy to deal with. Contact is the best retailer to look after our customers in terms of service, pricing and stability.”

There would be no impact on customers' power supply, he said.