Lethargic users blamed for high power prices
Want to spend less on power? Stop being so sticky.
Yep, that's right – sticky.
Kiwis could save an estimated $240 million every year on their power bills, but simply do not bother shopping around for the best deal.
The Electricity Authority's (EA) consumer switching fund report found this consumer "stickiness" in the residential market meant that incumbent retailers "generally charge prices above the most competitive offer".
In short, consumers too lethargic to consider alternatives are paying through the nose for power, because they provide little incentive for power companies to compete.
Stickiness in the consumer market had been identified by the EA as a big challenge to overcome, and is a focus of its power-switching campaign, What's My Number.
The national campaign includes prime time television commercials urging consumers to log on to the What's My Number website and see how much they could save by switching retailers.
And before anyone complains about taxpayers paying for this advertising for power retailers, they should relax.
A levy has been imposed on the energy retailers to fund the programme.
Over three years the authority is pouring $5m of retailers' dosh into converting us from "meh, who cares about my power provider so long as the telly and heater works" to "I can't believe I am paying $300 more per year on power than I need to, I am switching!".
Or as the authority put it, it is a campaign "to promote the benefits of shopping around for the best power deal".
And so far it's working, if the latest statistics released by the authority are anything to go by.
Since its launch in late May, 293,896 people visited whatsmynumber.org.nz with a further 120,096 "click throughs" to the Powerswitch website run by Consumer NZ.
And of those that have clicked through to Powerswitch, almost 46,000 Kiwis have taken the leap and switched retailers, with estimated savings already hitting $37m.
EA switching programme manager Todd Collings said the authority had expected switching to go up on the back of the campaign. But he wants more Kiwis to heed the call.
"That's what we are missing in the market. More switching," Collings said.
The theory behind encouraging consumers to switch instead of stick is something along the lines of not only will it save consumers cash, it will also encourage retailers to be more competitive and offer better deals.
- © Fairfax NZ News