The growth of niche electricity retailers has helped widen the gap between the cheapest electricity and what the average household is paying, with consumers now standing to gain an average of $175 by switching.
The average household can save $10 more on their power bills than they could last year, with potential savings topping $280 in some regions.
The Electricity Authority is crediting the change to increased competition, helped by an influx of small, niche companies intent on taking on the big retailers. Four electricity retailers have started in the past two years, taking the total number of retail brands to 22, owned by 15 parent retailers, authority chief executive Carl Hansen said.
Mr Hansen said the many new companies were small and were often targeting particular groups.
Newcomer Hunet Energy, an Auckland-focused company, for example, offers service in English and Korean. Marvellous Lovely Power Co, a West Auckland-based company, has been targeting Pacific Island churches. And Dunedin-based Payless Energy is pitching price savings to people in Otago.
Some of the new companies have little or no customer base to speak of, but were positioning themselves to compete, Mr Hansen said.
Hunet, for example, made a net gain of just 39 customers in February, according to switching figures from the authority.
A more established relative newcomer to the retail business, Pulse Utilities, by comparison, gained 503 people.
As new players were establishing, the price gap between some of the big retailers widened.
Meridian was already cheaper than Mercury in 23 of the 30 regions in which the companies competed before a recent round of price rises, Mr Hansen said. Then Mercury raised its prices, further widening the gap.
"You've had many of the retailers announce price increases for this year. If you strip out the transmission and distribution charges and just look at the energy component, Mercury announced it was increasing its energy component by 2.9 per cent in Auckland and 1.8 per cent in Wellington," he said.
"But Meridian said a week or two later they were not going to change their energy component. So there are quite divergent pricing strategies going on."
The authority's switching numbers for February reveal Mercury lost 378 customers while Meridian gained a net 196. Contact lost 913.
Mr Hansen said people could often save more than the national average annual price increase - which was 5.6 per cent last year - by shopping around. By the authority's calculations, people in Manawatu-Wanganui have the smallest average potential savings, a still-significant $92 a year, while people in the Bay of Plenty and Marlborough can save the most at $280 on average annually.
The gap between what the average household is paying and the cheapest option is $193 in Auckland and $134 in Wellington.
The savings numbers were released as part of the Electricity Authority's new power switching campaign, which this year will focus on reaching women.
Two years into the switching campaign, overall awareness of the ability and ease of switching was good, so the authority could focus on filling in the gaps, he said.
In some areas, groups of ordinary customers are banding together to try to win better prices. The Nelson Energy Team Trust, a non-profit, is trying to win 20,000 members so it can bulk-bargain with retailers for a cheaper electricity deal.
The authority says retailers are increasingly approaching people to switch.
Calculate the cheapest company by going to www.whatsmynumber.org.nz or Consumer's Powerswitch.org.nz website.
- ? Fairfax NZ News
Source: http://www.stuff.co.nz/business/industries/8524297/Niche-retailers-power-deals-can-save-customers
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