Consumer plan comparison and switching

Consultation overview

The Electricity Authority (the Authority) sought feedback on options to promote consumer comparison and switching between electricity pricing plans and retailers.

The complexity of electricity plans can make it difficult for consumers to choose the right one for their household or business. Consumers need to have access to accurate and digestible information so that they can compare plans and easily switch if a better offer is available.

The Authority presented website and consumer choice support options to promote consumer comparison and switching.

The 5 website options were:

• Option 1: No Authority/government supported or endorsed website
• Option 2: Retailer-run collective website
• Option 3: Authority accredited, externally run, websites
• Option 4: Authority-supported existing or new, externally run, websites
• Option 5: Expanded government utility comparison website.

The 3 consumer choice support options were:

• Option A: Retailers provide their existing consumers with best plan information
• Option B: Community advisers to support comparison and switching
• Option C: Promotional activity and campaigns for comparison and switching services.

Submissions on this consultation closed on 8 March 2024.

Consumer plan comparison and switching - Electricity Authority(external link)

Our recommendations

We submitted a response to this consultation with the following recommendations and notes.

• We broadly agree with the points made by the Authority. We note that New Zealand’s approach to addressing barriers has relied heavily on promoting price comparison sites to consumers. As overseas research shows, there are limitations to what these sites, by themselves, can achieve and policy decisions need to recognise this. 
• It is essential (though not sufficient) for consumers to have access to an independent, non-commercial and robust price comparison website. Providing funding for such a site is consistent with the Authority’s statutory objective to protect consumer interests and its functions under sections 16 (1)(i) and (ia) of the Electricity Industry Act.
• While we consider the Authority should fund a comparison site, we do not support multiple sites being funded or supported. This would increase consumers’ search costs. 
• Our survey research shows trust in the electricity sector is not high, with just 48% of consumers saying they trust electricity providers to do the right thing by their customers. This finding suggests that any retailer-run or commercial comparison site would not be well received by consumers and would fail to meet their needs. 
• Of the 5 options presented in the consultation paper, we would like to see further investigation of Option 5: Expanded government utility comparison website alongside Option 4: Authority support existing or new, externally run, website. We also see merit in exploring a similar approach to that adopted in Australia where the Australian Energy Regulator runs the Energy Made Easy comparison site. 
• We have conducted research on including a best plan notice on power bills, through our model electricity bill project, and strongly supports Option A: retailers provide their existing consumers with best plan information.
• Our preferred consumer support options are Option A: Retailers provide their existing consumers with best plan information and Option B: Community advisors to support switching. We consider these options would be the best ways to directly provide consumers with information to assist decisions about whether they are on the best plan.