Electricity Retailers Cannot Justify Fees That Target The Poorest

Amid profit announcements from the largest electricity retailers, advocates are calling on the Electricity Authority to ban disconnection fees that hit customers who can least afford to pay.

“While Mercury and Genesis announce profits this week, thousands of their customers are struggling so much to pay for power that they’re falling into debt and some are even facing disconnection,” said Kate Day, advocate with Common Grace Aotearoa.

Among electricity retailers, Mercury and Genesis disconnect the highest numbers of households that cannot afford to pay their bills. In the six months to 31 Mar 2023, Genesis disconnected 1,012 households for 24 hours or more because those households had not paid their bills. Mercury disconnected 2,705 households for non-payment.(1)

“On average over that period, that was between 5 and 6 households per day disconnected by Genesis, and 15 households per day disconnected by Mercury, because those households hadn’t paid their bills," said Kate Day.

“That is families going without heating, hot water and lighting, and under severe stress. It’s distasteful to hear about retailers’ profits when a portion of that comes from households who are struggling to afford a basic necessity.

“What’s more, those companies then charge disconnection fees. According to company websites, Genesis customers disconnected for non-payment will pay $192.00 if they have a manual meter, or $29 with a smart meter (those fees include free reconnection).(2) Mercury customers will pay $70 if disconnected for non-payment and a further $70 to reconnect.(3)

“According to the Consumer Care Guidelines for electricity retailers, fees are supposed to be reasonable. In May, we asked these companies to tell us what these fees are actually paying for. Neither company replied. We don’t think it’s ever reasonable to charge a fee that targets those who have already proven they cannot pay.”

“We’re calling on the Electricity Authority, and companies who want to do the right thing, to end these fees that target people who can least afford to pay,” Kate Day said.

Shirley McCombe, General Manager of Bay Financial Mentors in Tauranga agrees. “We see clients who are going without power or turning off heating to minimise usage. Others have been or are facing disconnection. Some clients turn to borrowing to pay for their power or go without other necessities like food to keep the electricity on. Power is just too expensive and to hear power companies have made record profits when so many people are struggling is hard to swallow.”

The call to end disconnection fees is part of Everyone Connected, a campaign supported by a growing number of organisations including FinCap, Citizens Advice Bureau and Child Poverty Action Group.

“We are calling on the Electricity Authority, and companies who want to do the right thing, to end these fees that target people who can least afford to pay,” said Kate Day.

Everyone Connected has a petition calling on the Electricity Authority to ban disconnection fees, ensure fair prepay prices and introduce enforceable rules for consumer care. The public can sign the petition at everyoneconnectednz.com.

The most recent public information about retailers’ disconnections for non-payment (excluding prepay): www.ea.govt.nz/documents/3370/9_June_2023.pdf, Table 3.

https://www.genesisenergy.co.nz/for-home/products/explore-pricing/special-fees

https://www.mercury.co.nz/terms-conditions/business/service-fees.aspx

ENDS

For further comment, contact Kate Day, 022 315 6499.

For background see everyoneconnectednz.com.

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