It's no coincidence that a slew of electricity price rises comes amid the warmest and sunniest summer we've had in ages.
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I bet the electricity companies are hoping we won't notice. The highly unpopular increases (Tasman customers of Contact Energy should immediately jump on to our power switching site Powerswitch to make sure they are on the cheapest plan) also come just as the electricity retailers announce huge profits. Contact Energy's profit is up 29 percent, Genesis, the biggest electricity retailer's profit, is up 85 percent.
And then there are the excuses – transmission costs and distribution costs are up, and retailers have no control over these. That's true, but also true is the fact that wholesale electricity prices are way low. In fact the Electricity Authority itself was talking about a potential drop in retail prices this year.
So how can these retailers get away with putting up their prices when there is supposedly so much competition for customers in an oversupplied market?
Beats me. You could sympathise with retailer arguments about transmission and distribution costs if their profits weren't so large. And you have to ask yourself, is it only domestic consumers who are facing these big increases? What is happening to industrial and commercial customers? I think we know the answers to both those questions.
One thing you can do as a domestic consumer is to drive the hardest possible bargain. Retailers will be relying on inertia around these price rises. Don't let them get away with it. Turn the heat back on the retailer by threatening to switch when your bill goes up then see how fast a deal emerges.
In the meantime visit powerswitch.org.nz to ensure you are on the cheapest plan in your area.
About the author:
Sue Chetwin has been our Chief Executive since April 2007 after more than 25 years in print journalism. She was formerly the Editor of Sunday News, Sunday Star Times and the Herald on Sunday. She says there are strong parallels between consumer advocacy and journalism.
Sue oversees all of Consumer’s operations and is also the public face of the organisation. Sue is a director of the Banking Ombudsman Scheme, an alternate on the Electricity and Gas Complaints Commission and a member of the Electricity Authority Retail Advisory group.
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