Power companies unfairly targeting the poorest

Power companies are unfairly targeting the poorest New Zealanders by charging them the highest electricity rates, Labour’s Energy spokesperson David Shearer says.

New figures obtained by Labour show those on pre-pay electricity plans – paying electricity bills in advance – pay up to 60 per cent more than those paying a regular power bill.

“That’s just wrong. Power companies are squeezing the poorest to maximise their profits. It’s a disgrace that they are hurting Kiwis who can least afford it.

Families in Northland, for example, pay 42 per cent more if they are on prepay, while those in Dunedin pay 58.7 per cent more and in Invercargill 60.8 per cent more. That means in the worst cases some customers on the cheapest pre-pay plan are paying more than $1500 a year more than those on the cheapest standard plan.

“Nearly all of those families are obliged to go on pre-pay schemes by the power companies because they face difficulties making ends meet and have fallen behind with payments in the past. They’re essentially forced to feed the meter to stay connected.

“Given they are paying up front – and are no risk of defaulting to the company – you’d expect pre-pay users to get a reasonable deal. Instead our power companies are charging them massively more than other customers because they have nowhere else to go. They also don’t get access to special deals or discounts.

“It’s heartless and unnecessary. This Government knows it has been going on but has done nothing to bring the industry into line.

“The NZ Consumer Institute published figures in 2012 showing excessive charges. Since then, it’s got worse, not better. Demand for greater profits as a result of the Government’s privatisation of our power companies is likely to drive prices up further for those who have no voice and no choice.

“Other countries regulate prices for those on pre-pay to an equivalent of those on regular retail schemes. That’s something that could be applied here to stop power companies actively targeting the most poor and vulnerable,” David Shearer says.

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