Power companies cut off more customers due to unpaid bills

Wednesday, 31 May 2017

Get in touch with your power company early if you're struggling to keep up with your bills.

Jessika* can still remember the tears in the eyes of the man who came to cut off her power.

She had a five-year-old and a new baby and had fallen two weeks behind on her electricity bill.

Her power company had given her three days' notice but the letter to warn her arrived the same day as the technician.

'I begged him not to and he was really upset and tried to buy time for me but I just couldn't come up with the money on the spot. I was crying at the door and he looked heartbroken,' she said.

'The sad thing about having your power disconnected is that you also have to pay a fee to have it cut and then put back on. So if you're financially not in a good place, which is what got you there In the first place, they then add more money on. Pretty terrible really.'

A growing number of New Zealand households are being disconnected by their power suppliers.

Electricity Authority data shows that in the last quarter of last year there were just over 6000 households disconnected due to non-payment.

The number has risen steadily from 3726 in the second quarter of 2015, when 3726 households were cut off.

Disconnections have still not reached the heights of 2006, when more than 11,000 customers were cut off each quarter.

The next year Folole Muliaga died after power was cut off to her Auckland property. That put scrutiny on disconnections and the number plummeted.

The rate then started to rise again until the end of 2014, when the Minister of Energy and Resources asked retailers to review their processes. It then fell before starting its most recent rise.

Nanette Moreau, Utilities Disputes Commissioner, said disconnections might increase when power companies decided they wanted to crack down on credit. 'That could be part of it, and coming into winter bills increase and it's harder for people.'

She said many people did not know what to do when they faced disconnection.

In one case, a woman contacted her office who, after a year of misunderstanding with her power provider, had been issued a disconnection notice. When Utilities Disputes' conciliators heard the situation, they put her in touch with the right people at the company and the disconnection was averted.

She said the most important thing was not to ignore the problem. 'Get hold of your provider and talk through the difficulties you've got. It may be that the provider can come up with a payment arrangement, or you could consider a prepay connection as an option.'

Moreau recommend that people who were having trouble use the word 'complaint' when they were dealing with power companies. 'What you want to do is avoid being disconnected and having to be reconnected and the costs that go along with that.'

Jenny Cameron, chief executive of the Electricity Retailers association, said disconnection was the last option.

'Retailers spend a great deal of time and effort working through the issues with the customer. There is an industry standard for this which sits with the Electricity Authority,' she said.

'This includes referrals to budgeting services or WINZ, providing advice to customers about different payment options, assisting them to spread unpaid bills over future payments, providing advice about whether they are on the right plan, and whether they can use their power in a more efficient way. This process can take anything from six to 12 months.'

She said disconnections represented 0.3 per cent of connected households and most were reconnected within 72 hours.

'If people think they are getting into trouble with their bill they should talk to their retailer who should work with them on tools that will help avoid a disconnection - like smoothing payments over the year between the higher winter bills and lower summer bills, plans better suited to their circumstances, and ways to make their home more energy efficient so bills are kept as low as possible.'

Consumer NZ spokeswoman Jessica Wilson said many customers who had been disconnected had little choice but to switch to a prepay plan.

'However, there are no specific protections for prepay customers and limited monitoring of services,' she said.

'Our research has found it's possible for consumers on prepay plans to end up paying more for their power than customers on traditional post-pay options. Prepay customers can also face other fees, such as fees to get a refund of credit on their meter.'

Your rights

Your retailer needs to make a reasonable effort to contact you before disconnecting your power.
If you don't pay your bill, your retailer should contact you to let you know it is overdue.
If the bill is still not paid you'll be sent a notice of disconnection at least seven days before the disconnection takes place.
If you are struggling to pay your bill contact your electricity retailer as soon as you can to discuss options.
If you do get disconnected, as soon as you've met the requirements for reconnection (usually by paying off the debt), your retailer should reconnect your power.

Source: Electricity Authority

* Jessika does not want her name published, to protect her identity.