Power petition calls for a little grace
Apetition to end hefty fees for people who have had their electricity disconnected because of non-payment will be presented to the Electricity Authority this week.
Close to 8000 households have signed the Common Grace Aotearoa petition calling for the fees to be scrapped.
The Common Grace investigation found huge variation in what companies charge. It said more clarity was needed about the actual costs of disconnection and reconnection.
The disconnection and reconnection fees of 33 New Zealand electricity companies were looked at as part of the Everyone Connected campaign.
According to Consumer NZ, up to 40,000 households had their electricity cut off because they couldn’t afford to pay their bills.
“At this moment of hardship, power companies are allowed to charge them a disconnection fee, then an additional fee to reconnect their power,” said Kate Day, co-director of Common Grace Aotearoa. “We know that these fees are causing harm and pushing people further into debt.”
Day said one family spent an extra week without power during winter so the solo mum could save the fees to get the power turned back on.
Even the threat of fees adds significant stress to people struggling.
“We therefore investigated whether these fees are reasonable as required under the Consumer Care Guidelines,” Day said.
Among the remaining companies, when no site visits were required, fees ranged from $0 to $235 for the total of disconnection and reconnection.
● Powershop charges $0 for disconnection but $90 for reconnection (total $90).
● Frank Energy charges $29 for disconnection, $105 for reconnection (total $134).
● Slingshot, Orcon and 2degrees charge $90 for disconnection, $70 for reconnection (total $160).
● Pulse and Pioneer charge $95 for disconnection, $75 for reconnection (total $170).
● Two companies — Toast Electric and Nau Mai Rā — choose not to charge disconnection fees at all.
“We considered these fees very high for a digital process that can be done in a short time,” Day said. “We were also surprised at the variation, given that fees are required to reflect actual costs.”
When site visits are required, companies charge between $0 and $300 for the total of disconnection and reconnection. These include:
● Frank Energy $192 + $105 = $297
● Ecotricity $138+$138 = $276
● Contact $110 + $150 = $260
● Meridian $125 + $125 = $250
● Flick $110 + $110 = $220
In “worst case scenarios”, where site visits and after-hours reconnections are required, Genesis and Frank Energy charged up to $417.
“These fees are very high for a household that is already unable to afford their electricity,” Day said.
“Many people on low incomes are renters and therefore unable to install a smart meter, so it seems unfair they bear the cost of higher manual fees.”
Day said there was a lack of transparency in the breakdown of fees and how companies arrived at the figures. Dozens of companies were asked to explain the components of fees but only three replied.
Only Flick gave a breakdown of the costs. Flick described disconnection as “a last resort” that came after a 10-week debt cycle process.
“Several companies told us they waive fees for customers in hardship who are engaging with them, which reinforces that companies can choose not to charge these fees,” Day said.
She said many households facing poverty did not engage with the companies but instead kept the problem to themselves, got into debt, borrowed money or went without power.
“We ask those companies to stop charging these fees to anyone facing disconnection for unpaid bills. Not all customers can engage with their power company when under high stress, and facing disconnection is a sufficient indication that a household needs extra care.
“We call on the Electricity Authority to ban these unclear, unkind and unreasonable fees as soon as possible. In the meantime, we call on companies to do the right thing and stop charging these fees. They are causing harm by pushing people further into debt.”
Phil Squire from Toast Electric said the not-for-profit power provider did not charge disconnection fees.
“I can’t see the justification for charging these fees to households already struggling with the cost of power,” he said.
“There are certainly costs to disconnection and reconnection, and theoretically if these costs are not charged they will be socialised across the whole customer base.”