Easier for Consumers to Switch Electricity Retaile
18 April 2000
Easier for Consumers to Switch Electricity Retailer
Consumers who choose to change their electricity retailer can now be switched within two working days, under new rules governing how electricity retailers operate.
The MARIA Governance Board, the body that governs electricity customer switching, has brought these rules into effect. The new rules were passed after the electricity industry identified the causes of delays in the old switching process and worked with the MARIA Governance Board to address the problem. The improvements in the rules set out strict deadlines retailers must follow in transferring information between each other and will improve the speed electricity consumers take to switch retailer.
“The rules apply immediately and will kick start improved industry processes in this area”, said Governance Board Chairman, Richard Rowley.
The existing compliance regime that polices this process is also being strengthened to give it further disciplinary powers. The electricity industry is currently voting on this regime and implementation is predicted for mid-May.
“As the body responsible for policing these rules, M-co will be actively monitoring the behaviour of all parties and taking whatever steps are necessary to ensure compliance”, said Philip Bradley, M-co’s Chief Executive.
By sharpening the teeth of MARIA (the industry arrangement within which the customer switching rules sit) the improved rules aggressively assert two of MARIA’s Guiding Principles “Facilitate competition and choice by end-users” and “Be robust and enforceable”.
Customer switching officially began on 1 April 1999. Over the past year, electricity retailers have used the new profiling-based reconciliation system to settle the switching of 81,440 consumers.
There are around 1.6 million electricity consumers in New Zealand. Similar systems overseas have resulted in around 5 per cent of the population choosing to change in the first year of operation. In its first twelve months the New Zealand system experienced a ‘customer churn’ of more than 5 per cent – right on the target set by overseas systems. With these new rules, the industry fully expects competition to increase between retailers.
Electricity consumers are able to switch retailer thanks to a low-cost system, known as profiling, that operates under a set of electricity industry rules - the Metering and Reconciliation Information Agreement (MARIA).
The information has been released by M-co (The Marketplace Company) and the MARIA Governance Board. In 1998-99 M-co, in consultation with the electricity industry, developed the system to enable consumers to switch retail suppliers. M-co also administers MARIA. The MARIA Governance Board oversees the operation of the MARIA rules and ensures their continuous improvement.
The diagram on the following page demonstrates the new process. The graph shows the total numbers of electricity customers who have switched over the last year.
For further information please contact:
Richard Rowley, MARIA Governance Board Chair
Ph: 09 476-1926
Philip Bradley, M-co Chief Executive
Ph: 04 473-5240 (bus) 025 916-186 (mobile)