Electricity retailers must do right by consumers

Winter has come. Well and truly. It’s a time when we want to put our heaters on and hunker down. Easy for some. Harder this winter for many as the cost of living crisis puts pressure on household budgets.

But we need warm homes to stay healthy. That means we need the power to stay on. And be affordable. Nobody wants to be disconnected.

It’s especially important for those dependent on electric medical devices.

When it comes to electricity, we don’t have much choice – it’s an essential service that we all need. At least we can choose our retailer. There are 38 of them, though most of the power – more than 70% – is supplied through the 4 big retailers.

So, are they all doing the right thing by us? Well, in truth, we don’t really know for sure. We surveyed consumers recently and 1 in 3 consumers told us they’re not sure they’re getting a good deal, but most were happy with their retailer.

When you sign up with a retailer, you expect the power to stay on, you have certain expectations about how they will treat you and how they will deal with you if you run into difficulties paying your bill.

But there are no hard and fast rules about how retailers should be looking after you. There’s something called the Consumer Care Guidelines – a well-intentioned set of standards retailers collaborated on to create and agreed to abide by. They are encouraged to follow the guidelines by the market regulator, the Electricity Authority. Encouraged mind you, not forced.

The guidelines evolved after the death of teacher, Folole Muliaga, who needed an electrically powered oxygen machine at home. She died in 2007 after her retailer cut off her power due to an unpaid $168.40 bill.

The guidelines encourage retailers to 'make sure you have every opportunity to be on the best pricing plan to meet your needs'. As well, consumers should be treated with 'care and respect'. There are rules around disconnections, how those of us who are medically dependent on electricity should be treated, and more. All good stuff.

So, the Electricity Authority is a bit like a referee when it comes to electricity. Trouble is, the guidelines are really just that. They have no teeth.

Think what would happen in a rugby game if there were optional rules – sure, the game carries on, but ultimately there’s going to be unfair results if some players play by the voluntary rules and others just don’t. Fans, players, everyone ends up unhappy with that.

Some retailers are really good, and they play by the voluntary rules. But it’s now crystal clear that some don’t care about minimum standards for consumers. We know this because the Authority has just released the results of its first survey of how well retailers are meeting the minimum standards of the guidelines.

It makes for uncomfortable reading. Of the 38 retailers, 9 thumbed their nose at the regulator and didn’t even bother replying, including Nova with 65,000 customers. 3 of the big 6 retailers, (Genesis, Mercury and Trustpower) admitted they weren’t fully complying with the guidelines. Just 18 reckoned they fully complied. The Authority wasn’t so sure they actually did. But how would consumers really know based on a self-assessment by some retailers and a review by the Authority?

Our organisation, the Consumer Advocacy Council, was established to be a strong voice for electricity consumers – residents and small businesses. And right now, we are saying very loudly to the Electricity Authority, you need to make the guidelines mandatory. And give them teeth, including rules about disclosure and big, beefy penalties for those not playing by the rules. Protecting electricity consumers is too important to be left to a voluntary guide that some retailers choose to follow and others don’t.

We know some big and small retailers, like Meridian and Flick, are keen on the guidelines being mandatory. They reckon it will create a level playing field – better for competition and much better for consumers. Good on them, we say.

On its website, the Electricity Authority says, 'consumers' best interests are at the heart of everything we do'.

Well, time for some basic consumer protections for all then. By making the guidelines mandatory, we can better ensure there is a well-functioning, competitive electricity market that properly balances the interests of consumers.

It’s time.