Meridian to replace unfair prompt payment discounts
Meridian to replace unfair prompt payment discounts with guaranteed discount for all customers
Meridian Energy will replace prompt payment discounts with a monthly guaranteed discount of equal value to all customers from 1 October.
Meridian’s Chief Executive Neal Barclay says prompt payment discounts are unfair to customers who struggle to pay their energy bills, so Meridian will change the way it does business so all customers do better.
“We don’t want our customers to miss out on savings if they pay a few days late, which is what has been happening to a high number of our customers. The new way will mean everyone gets the same great savings, but without being hurt if they’re late on their payment date.”
Meridian is the first major energy retailer to announce the end of prompt payment discounts. Neal Barclay says the decision is about making Meridian’s pricing fairer. The move is expected to cost the retailer $5 million, which it says will not be recovered from elsewhere in customers’ bills.
“Prompt payment discounts were introduced with good intentions, but over time they have come to disproportionately impact those who can least afford to pay their energy costs. They disadvantage customers who are struggling the most.
“We’ve had a project team working on how to support our most vulnerable customers, and replacing prompt payment discounts is a concrete step we can take as a company to be fairer in our pricing,” Barclay says.
Meridian has been reviewing prompt payment discounts for 18 months. Barclay says the government’s Electricity Price Review finding that vulnerable households were disproportionately affected provided the incentive to publicly announce the move.
“While the review acknowledges that New Zealand has one of the best performing electricity systems in the world, it has also highlighted that many NZ households face energy hardship and the Industry needs to step up to do more to support those customers. It has been the kick in the pants the industry has needed, to be perfectly honest.”