NZ power customers switching supplier in record numbers - Electricity Authority
If every New Zealander changed power companies to the cheapest one available to them, they could have saved a combined $307 million last year.
That's according to new data from the Electricity Authority, which shows there are now a record number of brands available for New Zealanders.
In the year to December 2015, 12 of New Zealand's 16 regions had an increase in the number of electricity retail brands available for consumers to choose from.
Consumers switched among them in record numbers – almost 418,000 consumers changed their electricity supplier during the year.
The Electricity Authority said the average amount they could save was $175 a year.
But that rate varied around the country - Bay of Plenty customers could save an average $331.25 by switching to the cheapest plan available while Hawke's Bay households could save $135.
Northland and Otago households were most likely to be on plans that cost less than the average amount - 57 per cent had switched to such deals. But Southland households were least likely to be getting a cheaper-than-average deal. Only 52 per cent were on such a plan.
A greater percentage of North Island household switched than those in the South Island. Wellington had the highest switching rate in the country. There, almost a quarter of power customers switched during the year.
Carl Hansen, Electricity Authority chief executive, said the market was becoming increasingly competitive, as consumers started to take more notice of what was available to them.
The report showed growth in small, independent brands. Together, these brands now have almost 80,000 customers, up 12 per cent compared to the year before.
"While many of these retailers remain small, they are adding competitive pressure from the margins, which means the larger players need to keep innovating in order to maintain their market share," Hansen said.
"As well as more choice in the number of retailers available, a big trend in 2015 was more innovative electricity plans and payment options on offer," he said.
Sue Chetwin, of Consumer NZ, welcomed the number of switches. "It does mean that people are thinking about their electricity retailer. More competition in the market seems to be prompting consumers to think about their bills."
But she said the big five retailers were still dominant. "[The new providers] are only just nipping at their heels. Nevertheless they are gaining market share and it means the big ones can't be as complacent as they have been."
She said Contact Energy would be worried about having lost 17,317 customers in 2015.
Trustpower overtook Meridian to become the fourth-largest retailer serving the residential electricity market in 2015. Trustpower and Nova Energy gained more than 20,550 customers between them.
Flick Electric had a strong performance in the residential market in 2015, gaining 6721 customers to increase from 410 customers at the start of the year to 7131 by the end of the year. Flick passes on wholesale prices to customers, plus a margin.
The report shows an increase in the number of prepay customers.
At the end of 2015 there were 43,560 pre-pay accounts, compared with 30,804 pre-pay accounts at the end of 2014.
Chetwin said that could have been because Globug introduced a Community Services Card discount for its members. But she said it was concerning that there were such a lot of people who had trouble meeting the requirements of a standard electricity contract.
"There is also a trend for contracts that have different pricing at different times of the day—119,953 consumers are now on this type of contract," Hansen said.
The Authority's review lists a range of other new options that are now available to electricity consumers including one retailer offering a "free hour of power", one retailer bundling electricity with gas, telecommunications and pay TV, other retailers passing on spot electricity prices and a range of new consumer apps and web tools available to help customers manage their bills or monitor their usage online.
Some retailers are now offering electricity plans targeted to electric vehicles or solar schemes.
Hansen said consumers should regularly check they were getting the best deal they could.