17 Jun 2020

Smaller power companies win on customer satisfaction - report

From Checkpoint, 6:14 pm on 17 June 2020

Consumer NZ's latest power company survey shows satisfaction with smaller providers is higher than for the bigger companies.

Some powerlines north of Granity were damaged in former cyclone Fehi, power companiy is concerned they may come down during former cyclone Gita causing power outage north of Granity and would pose a risk to life, warned to stay clear.

File image. Photo: RNZ / Rebekah Parsons-King

The top three places went to smaller brands. Flick Electric got the highest rating with a satisfaction score of 76 percent. Nova Energy (74 percent) and Electric Kiwi (71 percent) were next.

Just 43 percent of Trustpower customers were happy with the service they were getting.

Contact Energy also scored below average with a satisfaction rating of only 45 percent.

Consumer NZ head Jon Duffy told Checkpoint the best performers in the survey - the smaller companies -  had much less market share than the big five.

"Together they'd have less than 10 percent of the market. What people really liked about [them] were their prompt customer service and they consistently had the most competitive prices on powerswitch, according to our respondents.

"The biggest gripe was poor customer service. Things like long waits on the phone ... the second biggest one would be pricing - thinking what you have been billed by your power company is unreasonable or unfair.

"More than 50 percent of people responding to our survey had concerns about the price of power and managing their household costs and probably more concerningly, 17 percent of people told us over the last 12 months they had difficulty paying their power bill."

He said the survey was carried out in March and April, in the "very early" stages of the Covid-19 lockdown.

The coronavirus pandemic might push those numbers regarding paying bills up, he said.

Sixteen percent of people had missed the due date for paying their power bills and 12 percent overdue fees added to their bills.

Some people had to borrow from friends or family to pay their bills and 6 percent had to take out a loan to pay.

"In some cases we will be seeing [power poverty]. We do have expensive power in New Zealand so there are some people who are struggling.

"One of the concerning areas for us ... was this concept of what the power companies refer to as prompt payment discounts but what we think are really late payment penalties.

"The electricity pricing review came out pretty strongly to say that they should be dropped and set out some pretty clear reasons why it felt they were misleading to customers and unfairly penalised those power customers who can least afford to pay a late payment fee.

"Unfortunately to date, of the big five, Meridian is the only retailer that has dropped the prompt payment discounts."

Consumer NZ thought the other large power retailers should "get on board".

Other retailers said they weren't going to drop them altogether, but change them to better reflect the cost of collecting debt.

"That really summarises where we are at with these retailers have been using these ... really to increase their margins in the sense that if they are able to reduce the prompt payment discount to accurately reflect what it costs them to recover debt, it means they've been padding those discounts up to now, and we think that's not on."