Switching power companies made easier

Electricity customers will be able to change their supplier more quickly under a rule change approved by Energy and Resources Minister Gerry Brownlee.

From October, power retailers will be required to switch customers within 10 working days of being asked, and half of all switches must occur within five working days.  The previous rule allowed up to 23 working days for a switch.

The 2009 Ministerial Review into Electricity Market Performance indicated residential customers could save about $100 a year each - or $150 million a year across all customers - by switching to the cheapest available retailer, Mr Brownlee said.

Other estimates of savings have been higher, with Consumer New Zealand suggesting a small household can save up to $442 a year, and a large household more than $1000 a year, by switching power companies.¹

"It's a fact that New Zealanders can get cheaper power by shopping around, and it's heartening to see a switching culture bedding in," Mr Brownlee said.

"I know some companies are regularly exceeding the switching time limits we're implementing, which from the consumer's perspective is very encouraging.

"Those companies that make it quick and easy to switch, along with offering good deals, stand to win more customers," Mr Brownlee said.

Record numbers of customers have been switching their electricity supplier, with a new high of 34,892 switches reached during March 2010.

"The government is reforming the electricity market to make it more competitive and to constrain future price increases," Mr Brownlee said.

"Our reforms are working - consumers are switching at record levels.

"In parts of the South Island in particular, companies are offering extremely generous deals.

"Between May 2009 and May 2010 electricity prices rose by only 2.9 per cent - this can be compared to 72 per cent over eight years under Labour."

People can compare the deals offered by different companies in their area by visiting www.powerswitch.org.nz

The 2009 Ministerial Review found that the maximum switching time period of 23 business days was too lengthy and recommended it be shortened. 

The Electricity Commission completed two rounds of consultation before recommending the rule change to the Minister to shorten the switching time.

"I will be asking the new Electricity Authority to review switching times again next year to see if the switching period can be further reduced," Mr Brownlee said.

Further information on the rule change can be found at: www.electricitycommission.govt.nz/rulesandregs/recommend under the heading: Electricity Governance (Amendments to Parts E, H, and J of the Rules and Consequential Amendments to Part A of the Rules) Amendment Rules 2010

Source: Electricity Commission

¹ http://www.consumer.org.nz/news/view/editorial-power-shopping