Powerswitch funding uncertainty a concern for competition, says new power company

News release - 5 November 2015

Powerswitch funding uncertainty a concern for competition, says new power company

Start-up power company Electric Kiwi says the potential end to public funding for independent electricity price comparison website Powerswitch.org.nz could have serious implications for electricity market competition.

Consumer NZ has advised electricity retailers there is no guaranteed funding for Powerswitch beyond either March or June 2016 – and without funding, the website will no longer be able to operate. To June 2015 the website was funded by the Ministry of Business, Innovation and Employment (MBIE), with the remaining period assisted by the Electricity Authority (EA) and Gas Company Co.

Electric Kiwi managing director Julian Kardos said Powerswitch was a very important vehicle for promoting transparency and competition.

“Powerswitch is a level playing field that aims to cut through the deals and special offers to offer an independent look at what is the best value, long term for an individual consumer.”

“Power is one of the key bills for Kiwi households, and consumers can save hundreds of dollars a year by switching to a cheaper plan. Powerswitch does a huge amount to help people learn about those cheaper options and providers they may not even have been aware of.”

He said the Electricity Authority’s mandate to encourage competition in retail electricity had seen a number of small retailers enter the market, which was driving power plan innovation and keeping big players on their toes price-wise.

“The loss of an independent comparison site would impact small retailers, and ultimately the choice and prices available to consumers."

Electric Kiwi launched to the public in May this year.

MBIE data released in September showed electricity retailers reduced their energy prices by 2.3 per cent in the year ending June 2015.

In a news release at that time, the EA said the reduction showed competitive pressure was lowering the prices Kiwis pay for their electricity and it was “clear the larger retailers are fighting hard to maintain market share in the face of sharp competition from some small and medium sized players.”

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