No Profit From Switching Problems

Electricity Retailers Won’t Profit From Switching Problems

The committee that sits in judgement on electricity retailers who fail to switch customers within industry timeframes has imposed the first fine for breaching the customer switching rules.

The MARIA Conduct Committee, a quasi-judicial panel of independent experts on the electricity industry, has fined Mighty River Power $6,000 for failing to switch two industrial customers to TrustPower within the industry agreed timeframes. Mighty River Power is the owner of Auckland’s Mercury Energy brand.

“This decision against Mighty River Power is the first in response to many customer complaints,” said Terence Arnold QC, Chair of the MARIA Conduct Committee. “Mighty River just happened to be one of the first cases brought before the Committee.”

“The MARIA Conduct Committee intends to ensure the fines it imposes on guilty retailers will create the right incentive for all retailers to have their houses in order. If an accusation against a retailer is proven we will not hesitate to ensure that company will not profit from failing to switch its customers,” said Mr Arnold.

“In the case at hand, the MARIA Conduct Committee was pleased to note that Mighty River Power had voluntarily proposed to compensate Trustpower for the revenue lost as a result of the switching delay. The Committee took this into account in fixing the fine,” said Mr Arnold.

The majority of electricity retailers are currently under investigation for many different breaches of the customer switching rules. As the new MARIA compliance process beds down many more cases will be brought before the MARIA Conduct Committee.

The MARIA Conduct Committee met for the first time in mid-August and considered five cases, two of which related to customer switching and three concerned with technical information. These cases are continuing and as final decisions are made these will be released at http://www.m-co.co.nz/C3maria.htm.

There are currently complaints involving more than 2,000 customer switches, although investigation may reduce the number of cases requiring judgement by the MARIA Conduct Committee.

“In the normal course of events investigations will be brought before the Committee and dealt with within four weeks. There is currently a large number of initial complaints and dealing with this is taking time. However, I expect these investigations to be completed soon,” said Mr Arnold.

Under MARIA Rules, compensation can only be awarded to Retailers and not directly to end-use customers.

“Some retailers have already begun compensating their customers for problems occurring in the switching process,” said Mr Arnold. “Retailers may be able to claim the amounts they pay out to their customers from those companies which are holding up the process.”

There is currently one claim for compensation before the MARIA Conduct Committee. This matter is under investigation and should be resolved by the end of October.

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For further information, please contact the MARIA Conduct Committee’s Administrator:
Philip Bradley, Chief Executive of M-co
Ph: 04 473-5240 (bus) or 025 916-186

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