We always knew the broadband industry was full of tired, old practices and processes, but now we’ve joined the market with our own plans, we’ve realised the extent to which consumers are being let down.

We’ve been working hard to improve the energy industry to the benefit of Kiwi households and businesses for several years now – with plenty of success – and now we’re determined to make things better in broadband, too.

Our primary concern is notice periods. Customers usually have to give 30 days’ notice when they intend to leave, or at least notice until their next scheduled billing date. We believe these notice periods are designed to discourage switching because they create anxiety among consumers, and the general feeling that it’s all just too difficult. If you’ve remained with your broadband provider and tolerated high prices and poor service for years without leaving, you’re certainly not alone.

Notice periods are clearly a barrier to switching (we’ve done the research to prove it, below) and therefore undermine what’s supposed to be a competitive market. They’re not necessary in energy and we’re convinced they have no place in broadband either. That’s why we don’t charge in advance and don’t have contracts or notice periods.

But we know we face an uphill battle, because the processes we’re talking about work in favour of the incumbents. As one challenger telco put it to us when we contacted them about our intentions, “you can’t change anything without the support of Vodafone, 2degrees and Spark”.

Well, we accept the challenge.

We believe notice periods are designed to discourage switching because they create anxiety among consumers, and the general feeling that it’s all just too difficult.

The post Broadband notice periods need to go appeared first on Kiwiland Times.

The profits of the large, incumbent electricity gentailers have ballooned since COVID-19. They’re making record profits at the expense of energy affordability and the wellbeing of Kiwi households and businesses, writes Electric Kiwi CEO, Luke Blincoe.

I’ve never been more convinced that now is the time for the government to act and introduce long-overdue industry reforms, especially as consumers continue to face high energy bills and other cost of living pressures, while the big gentailers rake in the cash.

• Genesis reported its highest operating earnings of $440m since it was established two decades ago. Its net profit was up by 600% to $222m compared to $32m last year.
• Mercury reported it had more than tripled its net profit to $469m.
• Meridian’s net profit was $664m, up 55% from $428m last year.
• Contact made a profit of $182m, down slightly from last year but 50% above the profit they made in 2020.

All up, the big four’s net profits nearly doubled in the last 12 months, rising from $788m in aggregate to more than $1.5billion.

To put those numbers into perspective, Meridian’s profit went up by $640 for each of its retail customers. That’s money we reckon would be better in the hands of Kiwi families and businesses.

The time has come for the government to be bold and adopt the structural reform needed to ensure more cash is kept in the hands of Kiwi families and businesses, not these bloated corporations.

The post Gentailers’ record profits confirm now is the time for industry reform appeared first on Kiwiland Times.

The majority of Kiwis disagree with how Consumer NZ is running Powerswitch – and we think it’s time the supposed voice of consumers starts to listen.

After seeing our energy plans removed from Powerswitch because we refuse to pay the unfair tax that Consumer puts on good value plans, we decided to gauge the opinion of about 1,000 Kiwis to see whether or not we’re in tune with what consumers would expect from the government-backed comparison service.

It turns out that most people agree with us that Consumer NZ’s current approach to generating funds from energy retailers is unreasonable because it sees the cheapest retailers in the market saddled with the greatest financial burden, while the biggest retailers charging customers higher prices get away with tiny contributions.

The survey findings also show support for Electric Kiwi’s view that Consumer NZ should be doing more to highlight the benefits of innovative energy plans designed to incentivise load-shifting to support the green transition.

Consumer NZ may try to dismiss these findings because they highlight where they are going wrong, but to do so would be to dismiss what normal Kiwis think.

We’ve been trying to help Consumer NZ understand where they can and should be improving Powerswitch to the benefit of consumers for some time, but these discussions have broken down and eventually led to our plans being removed from the site altogether. We’ve frequently asked them to consider our suggestions for alternative funding solutions, but we’ve been completely dismissed at every turn.

Consumer NZ’s refusal to take our concerns seriously has resulted in the ridiculous situation of this publicly funded service not showing consumers all plans in market.

How load-shifting plans are represented on Powerswitch

Electric Kiwi’s concerns about Consumer NZ’s running of Powerswitch extends to how time of use energy plans are represented. They have embraced a standardised, one-size-fits-all approach to the assumptions used to determine the annual costs displayed for plans that promote load-shifting with cheaper off-peak rates, rather than making an effort to highlight the real-world savings that can be achieved with such products.

Incentivising behavioural change around energy usage is not only beneficial for consumers through reducing bills, but is crucial in supporting the green energy transition as more off-peak usage means less reliance on carbon-generating electricity. Consumer NZ’s policy of sameness equaling fairness seems lazy and is certainly misguided. The majority of Kiwi consumers agree.

The survey found:

• 75% of Kiwis are interested in changing their energy usage habits to support the green energy transition.
• 83% believe Powerswitch should do more to highlight the potential benefits of energy plans that support the green energy transition.

When asked how energy plans that encourage customers to move their power usage off-peak, with the incentive of lower prices, should be reflected on Powerswitch, the survey found:

• 69% think an average (or mean) of the real savings achieved by customers on these plans should be shown.
• 12% said the average savings made through behavioural change should be ignored in the prices shown.
• 5% of these types of plans should not be shown on Powerswitch.
• 14% said none of the above, not sure.

The post Most Kiwis disagree with Consumer NZ’s approach to Powerswitch appeared first on Kiwiland Times.

The energy comparison website, 75% funded by the Electricity Authority (via a levy on your bills) and run by Consumer NZ, is currently not listing Electric Kiwi’s plans. We think that’s a major problem.

The people behind the website, that’s supposed to be a beacon of information and transparency in the energy market, have decided it’s OK to remove retailers who refuse to pay them based on their funding model which punishes small independent retailers for being price-competitive while the big gentailers get away with minimal contribution.

We think Consumer NZ have lost their way. But what’s important right now is that Kiwis understand why they won’t be seeing us on Powerswitch – and therefore won’t be seeing some of the best deals in the market.

We are calling on Consumer NZ to do the right thing, and return all prices to the Powerswitch site immediately.

Here’s the issue:

• Powerswitch receives 75% of its funding from the government (via the Electricity Authority) which means it needs to raise the other 25% from elsewhere. To be fair to them, Consumer believe they should be funded 100% by the Electricity Authority, and we agree.
• The issue is how they go about raising money for the percentage of funds that do not come from the EA levy. For the past couple of years, Powerswitch has charged retailers $50 when users follow links from their site and join.
• This might sound fair – but we have objected to this model because it means that the price leading retailers like us – who offer the best deals to consumers – end up providing the vast majority of the funding for the website. We have previously been told by Consumer that the cheapest retailers would at times account for a whopping 60% of their retailer-generated revenue under this model, while the more expensive retailers get away with practically zero contribution. We don’t think this is fair given all retailers have a responsibility to contribute to this essential consumer service.
• While $50 does not sound like much, it means the cheapest deals will need to increase to cover the fee – while the expensive guys get to charge more and avoid the fees. Essentially, a government-funded comparison site – whose stated goal is to increase competition and transparency – is undermining the ability of retailers to offer better prices by hammering them with a levy. Sound like a smart approach?
• We have offered to contribute fairly (as we had done for years), but Consumer has refused our offers, so links to our website have not appeared on Powerswitch for some time but our prices still remained. We were not sure how making things less convenient for consumers fits into Consumer’s brand ethos, but we accepted it.
• Now Powerswitch have made the decision to remove retailers from their website entirely if they don’t agree to their funding model. So, this essential comparison site, run by ‘Consumer – the independent, non-profit organisation dedicated to getting New Zealanders a fairer deal’ has decided not to show consumers all of the options available to them. All we can say is, really?

What makes this even more frustrating – and mind-boggling – is that Consumer previously agreed a funding model with Electric Kiwi that acknowledged that the best-priced retailers having the burden of most of the fees was inappropriate. They have now backed out of that deal.

What do we suggest?

Firstly, we call on Consumer to do the right thing by energy customers, and make sure that all retailers are reflected in their panel as a matter of urgency.

Longer term, the best solution is that Powerswitch is entirely funded by the Electricity Authority (Consumer agree). And that a fair process to decide who runs this important service is conducted and reviewed by an independent body. If this cannot be achieved, then we suggest that Consumer seek fair contributions from the retailers, such as a fee weighted by market share or similar.

At the moment, we are not visible on the site, and that’s a bad thing for consumers (and Consumer NZ). While this mess is being sorted out, we expect Consumer to find a fair solution so that retailers bringing the best prices are not paying the lion’s share, or missing completely.

Unfortunately this isn’t the only problem with Powerswitch

Our concerns with Powerswitch extend to other areas, too. A key one is how they represent energy plans that incentivise behavioral change to support the green transition. We have been arguing with them for months about how our MoveMaster plan is displayed on their site. What they do is base estimates on a standardised, one-size-fits-all approach to time of use energy plans, when we can (and have) provided real-world evidence to show how consumers really use the plan, and benefit from it. Our customers actually see much greater savings than Consumer shows.

This might sound like we’re just salty because our prices are not displayed as favourably as we think they should be – but it’s bigger than that. Innovative energy plans like MoveMaster are designed to encourage households to shift their power usage away from peak times – and this behavior change will mean New Zealand is less reliant on fossil fuel generation. This type of innovation is essential to NZ achieving our decarbonisation goals and great for consumers.

The whole point of these plans is to drive behavior change, but Consumer NZ refuse to see the evidence of the gains that more than 10,000 households on this plan have made as relevant. They confuse sameness with fairness, and by doing this Powerswitch is doing consumers – and the green transition – a major disservice.

They have now reached the point of refusing to even meet with us to discuss this – and we find their attitude pretty disappointing.

What next?

The Powerswitch funding model really needs to change. We are in Consumer’s corner on this one and hope the Electricity Authority will soon see sense and ensure that 100% of the funding needed to maintain the website comes from government. This should ensure Powerswitch can get back to its original purpose of delivering an impartial energy comparison service for consumers. This can’t come a moment too soon because, currently, Consumer NZ’s behaviour appears more in line with a dodgy commercial site selling optics to the highest bidder.

Consumer have told us they are working with the EA with a view to changing their funding model once the current arrangement ends in July 2023. This would mean an end to unfair levys on the best value plans via these switching fees.

For its part, the EA needs to sharpen up on how it spends taxpayers’ money and run a transparent, competitive process to select the best service provider to run the comparison site. The cosy, closed shop arrangement as it stands would be defendable if the outcomes were themselves defendable.

Consumer also need to work on how they accurately display innovative offers in order to support the green energy transition. These offers will soon start coming thick and fast, and customers will be able to save money – and carbon – by understanding them. Consumer NZ first need to understand them if they think they can play a valuable role in helping others.

Maybe they should start by being willing to talk, or listen to, those in the industry that are trying to make it better.

The post We’re not currently appearing on Powerswitch – here’s why appeared first on Kiwiland Times.

There’s nothing like a good lick of paint to freshen the place up a bit. That doesn’t just apply to your apartment though, even your multi-billion-dollar energy generation companies need the occasional makeover. Though, when they do it, you should always remember those new green walls are still a depressing shade of grey underneath.

Introducing… Frank Energy, your new ‘straight talking’, ‘simple’ and sweary energy retailer, promising no fluff, guff, or gimmicks.

Sure.

But let’s be frank, Frank, you’re not Frank, you’re Genesis Energy – New Zealand’s biggest, publicly-listed electricity and gas company in disguise. To be more accurate, Frank is actually the rebirth of Energy Online – the brand Genesis bought way back when. We suppose the whole online theme finally ran its course… now it’s all about being ‘Frank’.

Sigh.

Genesis is getting quite good at this rebranding stuff, but they’ve had enough practice given the company is also behind Ecotricity… for those who didn’t know.

They’re not alone, of course. Here are the big energy companies pretending to be small retailers:

• Frank Energy – is really Genesis
• Ecotricity – is really Genesis
• Powershop – is really Meridian, but in Australia they have let Shell take over the pretending now
• GLOBUG – is really Mercury
• Flick Electric – is really Z Energy

If you’re a big power company that genuinely creates a different product proposition with a new brand – a bit like Meridian did with Powershop – then that’s fair enough. But if you’re just pretending to be a funky little challenger just to offer cheaper rates to customers you don’t already have, that’s another story.

So why do they do it? It’s a pretty cynical ploy when you think about it. They know their brands are old and tired (which is true) or just not very consumer friendly. So they think creating or buying smaller, newer, fresh-looking brands, talking about keeping things simple and throwing a few asterisks around in swear words will change perceptions of them. In some cases, it probably works. And if you’re happy handing over your cash to them, then great – each to their own.

We just think you deserve to know who the money is going to.

The post Let’s be frank, Frank. You’re not Frank, you’re Genesis. appeared first on Kiwiland Times.

The two big gambles with contracts:

1. That electricity prices are going to go up before your contract expires:

We have one of the most hotly contested electricity markets in the world. There is a war going on for customers that Kiwi families can benefit from if they are free to switch. The moment you are contracted your retailer doesn’t need to meet the market to keep you, and it’s their job to know more about electricity prices than you. In fact, as generators, many of them set the underlying wholesale cost- do you really think they are going to offer you a deal that makes you better off and them worse off? Of course not! They are betting against you with a loaded deck!

2. That your retailer will continue to offer you good service:

As an electricity consumer, your biggest leverage is to actually leave your retailer if you’re not happy. Once you give up that right, there’s really no reason for your retailer to look after you until you leave (see our blog about winbacks), which they know you can’t do anyway!

At Electric Kiwi, we back ourselves to always do two things:

1. Be competitively priced

We have to be because if we’re not, you can leave!

2. Offer awesome service so you’ll never have a reason to give us the flick!

That’s why we offer no contracts, but we’ll still reward loyalty on a handshake with our Loyal Kiwi plan!

Our advice?

If your retailer expects you to sign a contract to get their best deal, ask them why your word isn’t enough, after all its all they are giving you about the service levels you might enjoy. It’s always worth checking Facebook reviews to see how retailers are rated, if they don’t allow reviews you can only guess why!

We don’t believe that these “discounts” are actually discounts at all.

And we agree with the Commerce Commission that “discounts should be off the usual selling price”, not an inflated price invented specifically so that the discount could be added.

Some retailers, like Electric Kiwi don’t use prompt payment discounts. That’s because prompt payment discounts are really just late payment fees in disguise and we don’t think that’s very cool. You should pay for what you have used and nothing more. If that is the case, then how are these actually discounts at all?

It’s one of the big retailers’ dirty little secrets that their favourite customers are customers that pay in the end, but don’t pay on time.

One big retailer, for example, offers a 22% “discount” if you pay on time, while they use a cost of capital in their annual results of 7.4% per annum. That’s a lot of extra cash collected on people who miss the odd bill!

We reckon these late payment fees are excessive and punitive for those customers who fail to pay bills on time.

All of us forget the odd bill, is a 22% penalty fair?

And even if you always pay on time, we ask that you look at the prices after these discounts and don’t assume that a big discount means a better price!

The problem with large late penalties is made worse because it’s actually vulnerable households that are disproportionately affected. “Consumer NZ” survey found more than a quarter of households with incomes of less than $50,000 a year reported missing out on prompt payment discounts because they paid late”.

We reckon action is needed to stop this and we hope that the Electricity Price Review follows through on their proposal to ban them.

Win-backs refer to when you decide to switch for a better deal, but then suddenly your old electricity retailer decides they love you after all and whip out an amazing deal to convince you not to leave. Sneaky aye? Why didn’t they love you before?

See, we think you should get the opportunity to choose between all the available plans, and that there shouldn’t be any secret plans that magically appear only when you decide to leave.

Imagine if your landlord charged you too much for years then when you go to move, they offered you a rent decrease to stay? You’d be gutted right? Why was I paying more before you would think? It’s the same house!

At Electric Kiwi, we believe in a fair deal for everyone, that’s why we publish all of our prices so our customers can see all the deals we offer. We have different plans, but they have different benefits, that’s fair, we don’t charge some people more and some less for exactly the same thing!

We are all for competition and innovation, and we totally understand that some people prefer different options, some might prefer different price plans, like paying in advance for a discount, committing to staying for an agreed term for a better rate or some might prefer the flexibility to leave the moment service doesn’t meet their expectations.

We think every price should have quid pro quo and should be published so that customers know their options all the time.

Transparency sucks said no one, ever right?

In the long term, there is an impact that we think is really unfair. You see, the losing retailer knows all about the customer that’s leaving, and they use that information to decide who gets what deal. This means that people who struggle to pay or have low usage might not ever get a winback, instead, their retailer will keep them on the highest rate they can until they leave.

As a result, according to EMI, there is a gap of $371 million dollars per year between the price kiwis pay and the best price in the market. We call this number a “loyalty tax” where loyal (or in reality less mobile consumers) pay more and subsidise those that switch or get offered better rates when they try.

We actually care about fairness, and we think that stinks.

Another impact in the long term is that it makes it really hard for competition – yeah like us – to thrive, because we end up competing and winning only the customers that the big guys let us have.

In NZ our market relies on the competition that retailers like us bring to the market, in order to keep the big guys honest. Without competition, there would be no win-back offers, and in fact, everyone would just get the rack rate the big guys advertise.

There are a few proof points we reckon are quite interesting. In telecommunications, winbacks do not occur because of the regulations. As a result, you will notice that for example prices for broadband are advertised in the media, because there are no secret prices, and there isn’t a big gap between the best rate and the rate most people are on. In general, if you pay less, it is because you use less, and that is much more fair.

Our advice?

If you switch to us or any other retailer and you receive a counter offer, only accept it if they agree to back date it to when you signed up with them because if they are offering you a better rate now, for the exact same plan, they have been ripping you off for ages.

The post Why winbacks aren’t actually good for consumers appeared first on Kiwiland Times.

That’s just one of the stats in the Electricity Authority of New Zealand’s (EA) annual number-crunch of the residential power market, released on 28 July.

The EA says on average, Kiwi households could have saved $162 last year by switching to the cheapest power company.

Those with the most to gain from switching were folks from the Bay of Plenty, with $318 worth of average annual savings.

Estimated annual savings by region

• Bay of Plenty – $318
• Otago – $188
• Wellington – $177
• Taranaki – $161
• Canterbury – $150
• Waikato – $147
• Auckland – $136

Whether it’s $100 or $300, it’s definitely worth spending a minute or two checking out whether you could be better off.

Compare our power pricing

We’ve tried to make it easier for people to shop around by introducing our own Bill Compare tool.

All you need is a recent bill and a spare minute to enter a couple of figures. You’ll be shown how much you could have saved on that bill by being with Electric Kiwi.

If you like what you see, it then just takes a couple more minutes to complete your details online to sign up with us.

And that’s it. You don’t need to worry about contacting your current provider – we do all that for you.

Happy shopping!

The post 281 million reasons to switch power companies appeared first on Kiwiland Times.

Using electricity during the Hour of Power is not only good for your bank balance, it’s also good for the country.

Here’s why

In New Zealand, electricity generators monitor in real-time how much electricity is required across the nation. They then generate that amount of electricity to send to homes and businesses.

Around 80% of the electricity generated in New Zealand is from renewable sources, such as hydro, geothermal and wind. However, sometimes there is not enough renewable electricity to meet demand during ‘peak’ electricity use hours (such as 7-9am and 6-9pm when most people are showering, heating their homes and cooking), especially during a cold snap. This means expensive, and non-renewable, gas or coal-powered plants may need to start up and run for an hour or two during the peak – increasing the price of electricity.

Spreading the country’s electricity use more evenly throughout the day will help to reduce these spikes in demand, and the overall price of the electricity. This will send a signal to generators to reduce even further the proportion of non-renewable power used to power New Zealand.

The post Free power: Why it’s good for the country too appeared first on Kiwiland Times.