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Energy providers survey

A small independent retailer earns top marks in our latest energy provider satisfaction survey, while the big 5 underperform once more.

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If you land your dream job in the big city and join the growing number of Kiwis shifting into apartments, there’s a fair chance you’ll get your electricity from Bosco Connect. Now serving almost 25,000 customers in Auckland and Wellington, Bosco specialises in supplying power to apartment buildings, often serving as the default provider for new tenants.

The bad news is Bosco’s power costs a third more than the national average. Adding insult to injury, the retailer combines high tariffs with poor customer service. In our latest energy provider satisfaction survey, nearly 1 in 3 Bosco customers reported regularly spending a long time on hold waiting to speak with someone, significantly above the average. And some customers are being wrongly told by property managers they can’t switch to another provider.

Overall, just 28% of respondents described themselves as “very satisfied” with Bosco, a subsidiary of power giant Mercury Energy. But we found several other powercos also delivering sub-par service.

The big 5

The big 5 electricity retailers (Contact, Genesis, Mercury, Meridian and TrustPower), which still hold the lion’s share of customers, are perennial laggards in our annual energy provider satisfaction surveys. Not much has changed this year.

On average, only 45% of respondents said they were “very satisfied” with their energy provider. This satisfaction rate is worse than the banking and insurance industries, and dragged down largely by the performance of the big five. Their proportions of very satisfied customers are all below 50%.

With satisfaction rates that low, it’s easy to see why some consumers are looking at their options. Genesis lost more than 18,000 residential customers in the past year. Meanwhile, small independent players are snapping up dissatisfied punters by offering better customer service and competitive rates.

Smaller is better

Flick Electric 71% of Flick Electric’s customers were very satisfied with the company’s performance. Launched in 2014, Flick was the first retailer to offer residential consumers a tariff tied directly to electricity spot (wholesale) prices, which vary every half hour. In the past 3 years, Flick has won more than 20,000 customers.

The company scored above average for competitive prices. 63% were very satisfied they were getting good value for money, compared with the average of 29%.

Electric Kiwi Electric Kiwi, another new player, also rated above average for value for money. It lets you choose a free off-peak “hour of power” each day. Just over half of its consumers are very satisfied Electric Kiwi is helping them save energy, double the average for other providers.

Flick outperformed Electric Kiwi when it comes to customer support, perhaps unsurprisingly as you can only contact Electric Kiwi via email or LiveChat (or you can request a callback). As well, nearly 1 in 10 Electric Kiwi customers said they’d been billed incorrectly in the past year.

Some small brands owned by the big five performed well, while others were hit and miss.

Energy Online Energy Online, owned by Genesis Energy, had a higher-than-average proportion of happy campers. They liked its customer service, especially its ability to resolve problems in a timely manner. Energy Online customers were twice as likely to say the retailer offered good value for money compared to those with Genesis.

Powershop Customers of Powershop, which lets you buy blocks of power in advance, are significantly more likely to be satisfied than those with parent company Meridian.

Globug Prepay electricity service Globug, another Mercury retail brand and aimed at those who’ve been disconnected by other retailers and/or have poor credit, had a satisfaction score on par with the big 5.

Risk and reward

Some Flick customers have been grumbling over the past month that they’ve faced steeper bills than usual. That’s because low lake levels in the South Island, coupled with rising demand further north, has seen spot (wholesale) electricity prices skyrocket. In the middle of June, the average daily spot price was 15¢/kWh, more than double previous months.

The appeal of Flick’s spot-based contract is the savings you can reap during periods of low spot prices. But you need to be prepared to weather periods of higher prices in return for these savings. That said, if you’re on Flick and the bills become unmanageable, don’t hesitate to switch. Flick doesn’t have break fees.

What’s the issue?

A majority of respondents said cutting prices is the main thing that would improve their overall satisfaction. That’s not surprising – while unit prices have stagnated over the past few years, lingering at about 26¢/kWh since 2015, they haven’t fallen. And yearly increases in fixed daily charges continue to outpace inflation, so bills are still rising.

The upshot is many of us are still feeling the pinch from power prices, especially in winter. 30% of renters said they cut back on heating, blaming the price of power.

We uncovered several other issues plaguing the industry. 18% of consumers had encountered problems with incorrect bills. 38% had encountered long wait times to speak to a customer service rep and 21% unhelpful service once they finally got through. (For the worst culprits, see “Hall of shame”.)

However, some powercos are taking steps that are finding favour with respondents. More are offering apps and/or websites showing electricity usage and bill estimates. Of consumers using these services, 44% agreed they’re effective at helping them manage their power consumption. Customers of Meridian, Powershop, Electric Kiwi and Flick were more likely to use these services and find them effective.

Hall of shame

Here are the most egregious examples of powercos with customers reporting repeated issues in the past year.

Reported issue[width=50%] Powerco[width=50%]
Incorrect billing
8% of Electric Kiwi and Nova Energy customers reported experiencing incorrect billing 3 to 5 times in the past year. Nova EnergyElectric Kiwi
Unhelpful customer service
9% of Meridian Energy customers reported experiencing unhelpful customer service 3 to 5 times in the past year. Meridian Energy
Long wait times to speak to a customer service rep
Bosco Connect: 30% have experienced this 3 to 5 times in the past year.

Contact Energy: 6% have experienced this more than 5 times in the past year.

BoscoContact Energy
Helping you select a plan appropriate for your usage
Contact Energy: 17% dissatisfied. Contact Energy

Overall satisfaction results

Energy suppliers[width=40%]Very satisfied customers[bar;width=40%]
Become a Consumer member to see the results.71%
Become a Consumer member to see the results.61%
Become a Consumer member to see the results.59%
Become a Consumer member to see the results.58%
Become a Consumer member to see the results.57%
Become a Consumer member to see the results.56%
Become a Consumer member to see the results.49%
Become a Consumer member to see the results.49%
Become a Consumer member to see the results.45%
Become a Consumer member to see the results.44%
Become a Consumer member to see the results.43%
Become a Consumer member to see the results.42%
Become a Consumer member to see the results.40%
Become a Consumer member to see the results.28%

No choice at all

Bosco

“They don’t have competitive pricing”.

“Worst company ever”.

“Nobody likes to be told they have to deal with a provider they have never heard of”.

That’s what 3 Bosco customers we surveyed thought of the energy retailer. We aren’t surprised.

Wellington’s Soho apartments is the largest such complex in the capital, with 326 units. New Soho tenants receive a tenancy agreement stating in the fine print that Bosco is the default provider, but can choose another provider if they wish.

However, we’ve seen an email from a letting agent at Oxygen, a major property management company, claiming “you can only use one power supplier”.

Oxygen general manager Christian Casbolt said the information provided by the agent was incorrect and its Soho customers do have a choice of retailer, but Bosco is the default provider. However, the perception it’s the only option for power in the building is widespread. A morning spent interviewing Soho tenants failed to uncover anyone who had opted for another energy retailer.

Bosco also supplies energy to the common areas of Soho apartments, managed by the body corporate, at a cheaper price than the 35¢/kWh it charges for tenants.

Asked if it offers low rates to bodies corporate to get its foot in the door and become the default provider for tenants, Bosco defended the arrangements, stating the former usually qualified for lower commercial rates.

These default supply arrangements are defended on the basis of simplicity for the tenant as there’s a power provider ready to go when they move in, and that developers or body corporates can use their buying power to negotiate lower rates. But we reckon they compromise consumer choice. We’ll be raising property managers’ advice on switching retailers with the Commerce Commission.

Utilities Disputes

Utilities Disputes If you have a run-in with your electricity or gas provider (for example, you reckon they’ve got your bill wrong) it has 20 days to resolve your complaint. If that doesn’t work, you can go to Utilities Disputes, a free and independent resolution service for electricity and gas complaints. The service will look into your complaint and usually arrange an arbitration meeting between you and the provider.

One of the more colourful stories in its case notes concerns Mr K, whose electricity retailer mistakenly cut power to his holiday home. It took three months before K realised. In this time the food in his fridge and freezer spoiled and his cattle smashed through the inactive electric fencing, causing extensive damage. Utilities Disputes upheld K’s complaint, recommending $6000 compensation.

If you depend on your electricity staying on, you’d be forgiven for wanting to give this retailer a wide berth. However, the Utilities Disputes doesn’t name names in its decisions. While that’s in line with other dispute resolution services, such as the Banking Ombudsman and Telecommunications Dispute Resolution, we think naming retailers when complaints are upheld encourages better service.

Contact: utilitiesdisputes.co.nz

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