State-owned Meridian Energy has been caught out defending the rights of Australian power consumers over their own Kiwi customers.
In a submission to the Finkel electricity industry review in Australia, the company and its subsidiary Powershop have highlighted practices they say should be unacceptable in Australia. The irony is they consider those same practices to be perfectly acceptable in New Zealand.
The “hypocrisy” has been called out here by NZ’s fastest growing power retailer, Electric Kiwi, famous for its daily free “hour of power”.
“Meridian and its 100% owned subsidiary, Powershop, have been vocal in Australia that large retailers are guilty of ‘bullying’ and ‘ripping customers off’,” says Electric Kiwi chief executive Luke Blincoe “We find this astonishing, given Meridian is defending the exact same thing in New Zealand.
“In Australia, they have told the review they are concerned about large incumbent retailers ‘charging a loyalty tax to customers who fail to switch and utilising the proceeds of this loyalty tax to subsidise their apparently competitive market offers’. They say ‘At a time of increasing affordability issues, such behaviour is unacceptable in an essential service market’.
“Their submission across the ditch goes on to say ‘better transparency and discouraging business practices which feed on customer inertia may be part of this solution to this issue. In order to benefit customers, this must be done a way that helps, rather than hinders, competition’.
Here in NZ Meridian has told the Electricity Authority there is ‘no apparent regulatory or market failures in the area of acquisition’,” says Blincoe.
Furthermore, he says the evidence suggests the problem of consumers being ripped off by the big five retailers could be worse in New Zealand than Australia.
“Electricity Authority statistics show households that don’t switch retailer are being overcharged by a total of $370 million per annum, a figure which is growing at 30% each year.”
The Meridian revelation comes as the NZ Government’s Electricity Price Review swings into action, with a mandate to ensure the New Zealand electricity market delivers efficient, fair and equitable prices.
Blincoe says: “As a largely state-owned business, and custodian of New Zealand’s generation assets, we’d expect a greater level of patriotism from Meridian. Disingenuous activities like this from Meridian and the other big gentailers are hurting Kiwi families, to the tune of hundreds of millions of dollars a year. These guys only offer their best rates to people switching away, and we think that’s not what Kiwis expect.”