Protect families struggling with power prices

Electricity is an essential service, necessary for health and wellbeing. Most of us rely on it to stay warm, cook dinner, do our homework and keep the lights on. But lack of action from the regulator - the Electricity Authority, who sets the rules for electricity retailers - is causing unfair hardship.

*** Disconnection and reconnection fees are adding debt to whānau already suffering.
*** Prepay electricity is more expensive, even though many people who use prepay are doing so because they struggle to pay their bills and have no other option.
*** The Consumer Care Guidelines, which are meant to protect vulnerable people, remain voluntary and retailers can ignore them.

The Electricity Authority needs to protect people, especially the most vulnerable, by setting better rules for retailers.

In 2022, electricity retailers disconnected at least 8,500 households on standard plans where people could not afford to pay their bills. (1) Retailers were then allowed to charge these households “disconnection fees” and “reconnection fees”, which can total over $200, pushing people further into debt. The majority of households who are disconnected then end up with no choice but to use prepay plans, on which overall costs are on average 13% higher than standard plans (2). These prepay users - some 30,000 households - are paying a premium for being poor. Consumer NZ estimates that each night, as many as 50 households on pre-pay are sitting without electricity because they can’t afford to top up (3). Official data about these prepay disconnections is not even recorded.

The good news is that the Electricity Authority has the power to intervene. In December 2022, Parliament gave them an explicit objective to ‘protect the interests of domestic… consumers’ (ie households). No group deserves this protection more than the most vulnerable households.

It is time for the Electricity Authority to use this power.

We’re calling on them to:
***Protect consumers who are already struggling, by banning fees for disconnection/reconnection in cases of unpaid bills.
***End the ‘penalty for prepay’ by requiring retailers to publish prepay disconnection data and to ensure that prepay costs are no higher than their cheapest post-pay plan.
***Protect all consumers by making the full set of Consumer Care Guidelines mandatory, monitoring compliance and introducing penalties when retailers don’t follow the rules.

This petition is organised by Common Grace Aotearoa in collaboration with Anglican Advocacy, the Salvation Army, FinCap, Community Law Centres o Aotearoa, Child Poverty Action Group, Consumer NZ, He Kāinga Oranga Housing and Health Research Group (University of Otago Wellington), Citizens Advice Bureau, Toast Electric, Sustainability Trust, NZ Council of Christian Social Services, Presbyterian Support, Family Works New Zealand, The Bishop's Action Foundation and United Community Action Network. We will deliver the petition to the Electricity Authority Board in 2024.

Learn more, and get involved, at everyoneconnectednz.com.

(1)Data received under the Official Information Act from the Electricity Authority. www.ea.govt.nz/documents/3370/9_June_2023.pdf
(2,3)Consumer NZ analysis in June 2023. www.consumer.org.nz/articles/prepay-customers-paying-much-more-for-power
Photo sourced from iStock.