Consumer care guidelines were a voluntary mechanism for the electricity industry to ensure customers were treated fairly. After more than 1,000 submissions from the public, they’re now mandatory. 

Jim Lawless was already going through a difficult time in his life when he was handed the unexpected $1,235 bill. Juggling some full on stressors for his whānau, the Aucklander ended an electricity and broadband contract with Trustpower early, and was charged a break fee. “It seemed exorbitant, such a ridiculous amount,” he says. But having already had to go through long hold times and a confusing user interface when clarifying the electricity contract earlier, he was reluctant to complain – “I thought I wasn’t going to get anything” – so he paid the bill.

Trustpower, whose electricity arm is now owned by operator Mercury, says that the early termination fee was disclosed in the contract that Lawless originally received. However, Lawless’s experience raises questions about how customers are treated by New Zealand power companies.

The electricity industry has previously signed up to voluntary Consumer Care Guidelines that set an expectation for power providers to be fair and respectful in dealings with customers, even if they can’t pay, and work proactively to minimise harm, including from disconnection. But those guidelines haven’t been fully followed; a report last year showed that major power company Genesis wasn’t meeting its obligations (although adherence has improved). In response, the Electricity Authority (EA), the independent entity that governs and regulates electricity in New Zealand, announced yesterday that the guidelines will now be mandatory. 

“We believe this is the best pathway forward to ensure consumers receive a consistent and supportive level of care from their electricity retailer, regardless of who they choose,” says Sarah Gillies, the EA’s chief executive. 

After some further consultation about how the guidelines will be enforced, the mandatory regulations will be in place from January 1, 2025 next year. There may be some updates to the guidelines to make them clearer. 

Electricity is a basic need in New Zealand, and electricity companies are some of the country’s biggest publicly listed companies. Meridian, Contact, Genesis and Mercury, the biggest companies, made $2.7b in operating profits in the last financial year. Electricity poverty – including disconnection fees and different rates for people prepaying for power – continues to impact the poorest people most.

The authority received more than 1,000 submissions when they consulted communities and stakeholders about the guidelines. One of them was from Cherie Duncan, a budget adviser based in Marton in the lower North Island. She has regularly worked with clients in debt over electricity bill payments. 

“It made me feel helpless and frustrated – people didn’t have a voice,” she says. “It’s really empowering that they’ve made [the guidelines] mandatory, it’s a positive step for our people as financial mentors.” 

Many of Duncan’s clients aren’t just struggling to pay bills – they’re also in debt to power companies. Invoices for arrears and ongoing use are expected to be paid together, which can make it difficult for financial mentors to monitor payments and help people who are struggling. “People prioritise paying for power, they go without food to pay for power, but some still can’t afford it,” Duncan says. Often, they only know that someone is struggling when their power is disconnected. “That’s mentally and physically devastating for the whole whānau, especially kids who are at home, and it makes it harder to find another provider.” 

Duncan’s colleague Christina Marcroft would like there to be more flexibility, and for electricity companies to proactively reach out to customers who miss bill payments before their power is cut off. “We want it to be easier to find solutions, and for customers to be referred to budget services before they go into debt, so they can have the feeling of security over their power.” 

Both Marcroft and Duncan appreciate that electricity companies expect to be paid by customers. They’re hopeful that the new mandatory regulations will provide more flexibility and less distress for their clients who need it most. 

Katrina Chandler, who lives in Plimmerton, changed power companies to Genesis after a door-knocker came to her house in 2020. She signed up for a plan that allowed her to get cheaper power at night, and would plan her days to make sure to charge devices, do the washing and plug in her car in the evening. Last year, with the promised savings from the electric vehicle not materialising, she took a closer look at her power bill – and realised she’d never been switched to the night rate. 

“I was overcharged thousands, and I’m a reasonably savvy person,” she says. The power company hadn’t made it clear that she had to hire an electrician to activate a different meter for night power, even though it would be clear on her statement that she was still being charged peak prices. 

After a series of calls with the company and avoidant answers, Chandler decided to give up looking for recourse. “The new guidelines are a massive step to hold them to account – it should be mandatory that the plan you’re on is activated without an email battle or going to Utilities Disputes.”

Under the voluntary guidelines, there was no way to penalise companies who weren’t sticking to the principles, as happened to Lawless and Chandler. Kate Day, a spokesperson for electricity equity campaign Everyone Connected, is grateful that consumers’ voices were heard to make the guidelines mandatory. “The key will be having strong monitoring and enforcement – imposing penalties so there is recourse for consumers who have been treated unfairly,” she says. 

The campaign still wants to spotlight how pre-paid customers pay more for electricity, as well as wanting more data around disconnection rates and disconnection fees. “We all need electricity – this is a sign of real progress.” 

This story was amended on February 8 after Trustpower operator Mercury dispoted details of Jim Lawless’s contract. A Mercury representative emphasised that the early termination fee had been disclosed to Lawless, and that his plan also came with a TV and speaker.