Key orders heating inquiry(+isay)

Energy officials have been asked to look at whether heating and insulation companies are hiking prices in the wake of a government scheme.

But Waikato operators doubt there is any price gouging going on. Prime Minister John Key yesterday said he would be concerned if "effectively the government subsidy is just leading to higher prices and not the anticipated benefit to consumers".

"I've certainly said to my officials I think it's something we should have a look at."

The call comes after reports of companies raising their prices in the wake of the $323 million Warm Up New Zealand scheme.

One Lower Hutt man was charged $700 more by a government-approved provider than a company that had not signed up to the plan.

Approved companies have defended themselves by saying they offer a superior service to many competitors and face compliance costs because of the scheme. They have also warned that many people will not have their insulation and heating installed by next winter because the demand is so great and the first year's subsidies will run out.

Another Wellington couple got a quote of $3300 for a heat pump from government-approved company CozyCool. But when they called a local non-approved company, Wasabi Air, the price for the same Fujitsu ASTA 12LCC was only $2800.

Huntly Energy Efficiency Trust (HEET) general manager George New was unaware of any heating or insulation price "gouging" in the Waikato, and said he would be concerned if it was occurring. "We're not ripping people off, but I'm not suggesting it's not happening."

He believed it would be "absolutely unscrupulous" if heating and insulation installers were inflating prices on the back of the Government scheme. "I think Energy Efficiency and Conservation Authority (EECA) will be monitoring that sort of stuff pretty closely, to be fair."

Mr New said he did not think "cowboys" who might inflate prices would "get through". "They'll have to put in their prices, so EECA is aware of what those prices should be."

Homeseal Insulation director Doug Montgomery said his company had to submit its prices to EECA regularly, and was subject to random price audits.

He said he "struggled" to see how insulation and heating firms could inflate their prices given how closely they were monitored by EECA.

Isay: Have you been given an outrageous quote for insulation or home heating? Leave your comments below or e-mail the Waikato Times at Isay@WaikatoTimes.co.nz with your news and views.

- JEFF NEEMS/Waikato Times with the Dominion Post

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Chris   #2   08:48 am Aug 12 2009

Make no mistake people, this scheme is being rorted. I work for a heatpump company that is not part of the EECA scheme (we cannot participate at this stage because we are unable to provide assessments and upgrades of peoples insulation - the primary focus of the scheme).

Since the scheme started, I have heard of a number of companies that have hiked their prices. I am also aware that some people are being led to believe that they can simply get $500 towards the cost of the heatpump, and quite suprised when we explain that they first have to get their insulation looked at.

I am very eager to see how closely these operators are being scrutinized by EECA, and what penalties will be applied to those who are found to be scamming the system.

big al   #1   12:06 pm Aug 11 2009

Supply and demand. Nothing new here. This is how the private market works. Its been an unfortunate consequence, for example, of the Accommodation Supplement with private sector rents for the past 20 years. When there is an injection of monies from any source then unless the situation lends itself to a self regulating tendering process, prices go up. Profits will always be maximised. This is inherent with private sector pricing. No brainer John. Economics and Marketing 101!

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