Mighty River explains stand on comparisons

Last updated 05:00 09/10/2012

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Mighty River is defending its decision to stay out of a new state-funded price comparison campaign, claiming a private company is being paid to run a scheme competing with an existing Electricity Authority-backed scheme.

This month the Whatsmynumber? campaign, which initially focused on encouraging households to compare power providers, entered a new stage, promoting switching among small business.

Yesterday The Dominion Post revealed warnings from Electricity Authority chief executive Carl Hansen that Mighty River and Contact Energy could still opt to join the campaign, but that the door may be closed on them.

James Munro, Mighty River's retail manager said the company had consistently warned the regulator and SwitchMe, a private company running the commercial campaign, that it would not support a system which imposed cost on the consumer.

Unlike Powerswitch, run by Consumer New Zealand, SwitchMe "clipped the ticket" by charging an ongoing cost to retailers, which would ultimately be borne by consumers.

"That commercial service looks to be self-funding through money charged to retailers over the long term," Munro said.

"It will add costs and it disintermediates us from customers, quite unlike Powerswitch, which we do support."

Munro claimed the SwitchMe campaign would compete with the residential campaign, because it offered residential switching comparisons on the small business website.

"Any traffic that's driven to that website is driven to both the commercial and the residential thing.

That residential comparison site is in direct competition with Consumer's Powerswitch, which is free for customers, free for retailers and it's paid for through EA levies," Munro said.

"I think it's a bit odd."

Munro said he had been surprised by Hansen's comments because Mighty River had been told it had the option to join later.

He dismissed the idea that the warning might prompt a change of heart.

"Fine, if that's the consequence I guess we will have to live with it, but until we read Carl's comments I wasn't aware that that was the consequence," he said.

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- BusinessDay.co.nz

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