Electric Kiwi and Consumer NZ agree it would be best if the Powerswitch website was funded entirely by the Electricity Authority, but in the meantime they are at odds.
Independent power company Electric Kiwi says Consumer NZ has lost its way and “let down consumers” by removing details of Electric Kiwi’s power plans from its Powerswitch after a row over fees.
Consumer NZ chief executive Jon Duffy responded by accusing Electric Kiwi of seeking to “freeride” off support Consumer NZ received from other power firms to run the price comparison service, suggesting there was nothing in the firm’s power plans that warranted special treatment.
Powerswitch was set up with the support of the Government in 1999 to help consumers compare power plans and switch between providers.
But Electric Kiwi spokesperson Simon Downes said Consumer NZ had removed its plans from Powerswitch after the company declined to pay a commission that Consumer NZ began charging power companies in 2016 each time someone used the website to switch to their service.
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The switching fee is now $ 50 for each conversion.
Consumer NZ had been describing Powerswitch on its website as a “free and independent service” funded by the Electricity Authority that receives “some additional funding” from electricity and gas retailers, the Gas Industry Company, and the Ministry of Business, Innovation and Employment.
It updated its website on Friday to make clear that the additional funding was in the form of a “switching fee” after Stuff queried whether that should be disclosed.
Downes said the co-funding model meant power companies that charged the lowest prices tended to pay a disproportionate share of the cost of running Powerswitch, which he believed ran counter to the purpose of the website in promoting competition and lowering prices.
“While $ 50 does not sound like much, it means the cheapest deals will need to increase to
cover the fee while the expensive guys get to charge more and avoid the fees, ”he said.
“Essentially, a government-funded comparison site – whose stated goal is to increase competition and
transparency – is undermining the ability of retailers to offer better prices by hammering
them with a levy. “
Until a few days ago, Consumer NZ had been continuing to display Electric Kiwi’s plans on Powerswitch despite the company declining to pay the commissions, just without the live hyperlink that helped people switch via the site.
But Downes said Consumer NZ had decided to change its policy and remove details of plans from companies that didn’t pay the commissions from the website altogether.
“We have offered to contribute fairly, as we had done for years, but Consumer have refused
our offers, ”he said.
Consumer NZ should “do the right thing” and return all prices to Powerswitch immediately, he said.
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Downes and Duffy agreed it would be better if the Electricity Authority met the entire cost of running Powerswitch.
“We would prefer not to charge the switching fee,” Duffy said.
But he said almost all power retailers had been willing to pay the fees in order to support Powerswitch.
Electric Kiwi’s “lack of support” had consistently undermined Consumer NZ’s ability to provide consumers and retailers the service it wanted to, he said.
“Unfortunately, despite our best endeavors, this is no longer sustainable. It is unfair to continue to allow Electric Kiwi to freeride off the support provided by other retailers in the industry.
“We have discussed our concerns with Electric Kiwi on a number of occasions but have always reached an impasse due to Electric Kiwi’s insistence that it be treated differently to all other players in the industry.”
There was nothing in Electric Kiwi’s offering to customers that would justify that, Duffy said.
“Our observation is that Electric Kiwi is prepared to spend significant amounts of money on marketing to acquire new customers, but is not prepared to contribute for new customers it acquires via Powerswitch,” he said.