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Most Kiwi Consumers Can Now Chose TrustPower


Most Kiwi Consumers Can Now Chose TrustPower

Electricity retailer and generator TrustPower has announced that it is now able to supply nearly 80% of New Zealand electricity consumers.

Over the last 12 months, TrustPower has progressively extended its service to include consumers on the Vector Auckland, UNL Waitemata, Counties Power, WEL, UNL Thames Valley, Mainpower, Waitaki, Invercargill and Power Company networks.

This means that large numbers of consumers in the Auckland, North Shore/Waitemata, Pukekohe, Papakura, Hamilton, Huntly, Waihi, Thames, Morrinsville, Paeroa, Tokoroa, Kaiapoi, Rangiora, Amberley, Wigram, Oamaru, Kurow, coastal North Otago, Invercargill, Bluff, Winton, Gore and Lumsden areas can now chose TrustPower as their electricity supplier.

However, it is unlikely that the company will ever be in a position to supply everybody.

Energy Trading Manager Chris O'Hara says that while supplying 100% of New Zealanders would be the ideal from a competitive market point of view, achieving that would not be in the best interests of either TrustPower, or consumers.

"It is simply really. Electricity retailing is a business where to be viable you have to have a large number of customers, and make a small profit from each. If we were to offer supply to every corner of the country, we would simply end up with some areas where the number of customers we serviced was so small that we wouldn't even come close to covering our costs."

TrustPower's experience has been that most consumers change electricity retailer because of dissatisfaction over issues related to service, rather than price. As a result, Mr O'Hara says TrustPower has deliberately chosen to focus on quality of service, which has meant that it has had to place some limits on the areas it is able to serve.

"We survey the majority of departing customers and well as those that switch from other companies. Of those switching to us, roughly half tend to be lost customers returning, and the majority tell us their main issue is service. Over the last year the inflow of customers has consistently exceeded the outflow in many areas, which confirms our view that decent service is at the top of most consumer's electricity company shopping list."

He adds that retail electricity competition is alive and well in New Zealand, despite some claims to the contrary, because virtually all consumers now have a choice of at least two retailers.

"I think competition is great, because it keep everybody honest and raises the bar in terms of customer service. What critics have to realise however is that having a large number of retailers in any one market is actually likely to be counterproductive, because the smaller the number of customers each retailer has in a given area, the more difficult and more expensive it will be to service them."

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