Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Customer Win-backs Prove Gentailers Act as a Cartel

Customer Win-backs Prove Gentailers Act as a Cartel

Power-switching rules are being abused by the big five generator-retailers, who are acting to win back customers who have switched to another retailer.

The losers are the small independent retailers, and customers that are not targeted by a win-back team.

Data just released by the Electricity Authority show that up to 30% of customers switching to small retailers are persuaded to switch back again. Either they're offered a big discount to switch back, or they're threatened, sometimes incorrectly, with a big break fee.

The big retailers only make the effort to "save" their more profitable customers - bigger customers and those who always pay on time. The cost of their win-backs fall on - you guessed it - the poorer and more vulnerable customers. Their prices will rise again to fund those extra discounts.

Last year I challenged the Authority's chairman and CEO to prove they were not acting as a public cartel designed to raise prices. I said that Wikipedia defines a cartel as a formal agreement amongst competing firms to fix prices, marketing and production. 90% of all cartels succeed in raising prices.

The Authority's chiefs replied that they were not a cartel but a neutral regulator. They must now justify that in the face of continuing price rises and the struggles of small players in the market.

New Zealand's electricity market is failing, a victim of its own success. Price rises made it too easy to build new power stations. Now there's an electricity glut.

Market rules gave Transpower a property-right to big new price hikes. Now consumers are switching off - and electricity demand is falling for the first time ever. The next dry year will create a new electricity crisis, worse than the last because thermal power stations are being shut down now.

It's not enough to tweak rules to make the market a little easier for independent retailers, or vulnerable consumers. The whole basis for the electricity market has been proved wrong. It needs change from the bottom up.

Regulation must forbid the abuse of market power to raise prices, at both wholesale and retail levels. Every other country does that - only New Zealand persists with its failed experiment.

Power company share values will continue to fall until the cartel is replaced by a real regulator whose purpose is to promote the public interest. Only this can assuage today's rebellious consumers, and therefore offer companies a stable commercial environment.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Drone Strikes And Judith Collins‘ Last Stand

The news that a New Zealand citizen was killed last November in a US drone attack in Yemen brings the drones controversy closer to home.

To the US, drones are a legitimate response to the threat posed by the al Qaeda organisation and its franchisees... To the US, the drones carry the added advantage of not putting US troops at risk on the ground, and minimises the need for putting them in large numbers in bases in the countries concerned, always a politically sensitive point.

The counter-argument, well articulated by security analyst Paul Buchanan on RNZ this morning, is that this particular drone attack can be said to amount to an extra-judicial execution of a New Zealand citizen by one of our military allies, in circumstances where the person concerned posed no threat to New Zealand’s domestic security. More>>


Parliament Today:

Policies: Labour’s Economic Upgrade For Manufacturing

Labour Leader David Cunliffe has today announced his Economic Upgrade for the manufacturing sector – a plan that will create better jobs and higher wages. More>>


Gordon Campbell: On The Life And ACC Work Of Sir Owen Woodhouse

With the death of Sir Owen Woodhouse, the founding father of the Accident Compensation Scheme, New Zealand has lost one of the titans of its post-war social policy. More>>


Bad Transnationals: Rio Tinto Wins 2013 Roger Award

It won the 2011 Roger Award and was runner up in 2012, 2009 and 08. One 2013 nomination said simply and in its entirety: “Blackmailing country”... More>>


Select Committees: Tobacco Plain Packaging Hearings

The Stroke Foundation is today backing the Cancer Society and Smokefree Coalition who are making oral submissions to the Health Select Committee in support of proposed legislation to remove of all branding from tobacco products. More>>


Milk: Oravida Asked For Cabinet Help

New evidence released by New Zealand First today reveals Justice Minister Judith Collins used her position to manipulate the Government to help her husband’s company, Oravida, after the Fonterra botulism scare, says New Zealand First Leader Rt Hon Winston Peters. More>>


With Conditions: Ruataniwha Consents Approved In Draft Decision

The Tukituki Catchment Proposal Board of Inquiry has granted 17 resource consents relating to the $265 million Ruataniwha Water Storage Scheme in a draft decision that would open more of the Hawke’s Bay to irrigation. More>>


Fast Lanes, Campervans: Labour 'Making The Holidays Easier For Kiwi Drivers'

The next Labour Government will make the holidays easier and journeys quicker for Kiwi families driving on the roads, says Labour Leader David Cunliffe. More>>


Gordon Campbell: On Royalty And Its Tourism Spin-Offs

Ultimately the Queen’s longevity has been one of her most significant accomplishments. A transition to Prince Charles while the monarchy was in the pits of public esteem in the mid to late 1990s would have been disastrous for the Royal Firm. Far more congenial representatives have now emerged... More>>


Privacy (Again): ACC Demands Excessive Privacy Waivers

Labour: “This is just another example of ACC under National deliberately acting to deny treatment and compensation... Those who did fill in the form have effectively been victims of yet another ACC privacy breach. This time Judith Collins knew it was happening..." More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news