Switchme Blog

Electricity consulting for commercial customers becomes affordable.

With power prices constantly on the rise in residential and SME markets, commercially supplied business are also facing increases in commercial time of use rates. Higher levels of consumption, compounded by the uncertainty of the New Zealand electricity spot market are making a business’s choice of energy provider more critical than ever. With the potential difference in retailers being thousands of dollars annually, mistakes are often costly and irreversible. As a result businesses need to be asking the following questions:-

• Are they getting the best deal?
• Are they with the best electricity retailer?
• Are they getting as many competitors’ quotes as possible?
• Are they being offered the best plan for their business needs?
• Do they have the ability to accurately assess offers to know exactly what they are agreeing too?

These are all important factors for large electricity consumers with time of use meters to consider. The commercial half-hourly- metered billing system used by all energy retailers is complex and often confusing, this is even before a consumer considers the renewal process.

Unlike most businesses with standard metering, time-of-use customers do not have one fixed unit rate to depend on. In fact, the tariffs offered all depend on time, month, season and the state of the often volatile national electricity spot-market. Consequently, consumers need to be sure that the offer that they are accepting is the best they can possibly negotiate.

Unfortunately, most businesses are happy to simply renew their supply agreements with their current retailers and incur the increased tariffs based on the presumption that power price rises are inevitable. This is also often due to the complicated and time-consuming process of requesting multiple tenders to compete for the power supply and the absence of expert analysis from an industry consultant at an affordable rate.

Switchme has created an easy online service for businesses requiring independent and accurate tender management at an affordable price. Switchme has relationships with all electricity retailers and employs consultants with proven experience in the commercial electricity retail industry.  Switchme will distribute tenders to all major retailers, compile and provide detailed reporting on results, make recommendation on the best retailer for you and assist you with any necessary transition.

Why spend hours contacting all electricity retailers, filling out forms and supplying information to prospective suppliers only to still receive complex tariff data and the potential for further indecision?

Switchme have the tools, relationships and expertise to negotiate the best deal for time-of-use consumers at one fixed affordable rate of $199.00+GST. With the potential to save hundreds of dollars in time and potentially thousands of dollars by having retailers actively compete for your supply, accompanied with the assurance of advice from industry experts, every business can now have the benefit of a comprehensive electricity-supply tender process.

Electricity consumers in New Zealand have dealt with some of the sharpest electricity price increases in the world over the past 20 years.

Kiwi power tariffs now average on a global scale, but in 1990 they were the eighth lowest.

New Zealands annual power prices have increased more than 15c per KiloWatt hour  over the last 20 years , from 9.2c per kWh in 1990 to 25.5c at the end of 2010. That’s compared with a rise of less than 2c per kWh in Australia and around 3c per kWh in the USA.

In 2010 Australians were paying on average 14.83c while for New Zealanders, electricity was retailing for between 22.7c and 24.97c per kWh. Since this comparison was made, New Zealand prices have risen as high as 29.25c per kWh , showing that Kiwis are consistently paying considerably more than the Australian neighbors.

Basil Sharp, University of Auckland head of economics and the head of the New Zealand Energy Centre, said the increase in electricity prices was due to a growing economy.

“If you look at the historical relationship between consumption of energy and growth in GDP, when the economy is growing demand for electricity grows. When the demand is increasing you pay more for it.”

He said another factor was that most of New Zealand’s hydroelectricity had been developed and the next step would be other sources of generation, such as more expensive renewable sources. Australia had coal, which would seem cheap, barring carbon taxes.

But Sharp advises that people should be careful of making international comparisons. Government subsidies of $63.5 Billion were being given to the electricity sector globally every year. Although some countries are paying less for electricity, taxpayers are still paying for it via subsidies whereas New Zealands’ supply in unsubsidized.

Genesis Energy’s public affairs manager Richard Gordon said that the global comparison was meaningless, stating “New Zealand has a very esoteric electricity system that is structurally different from most other countries – mostly renewable generation with some thermal fuelled mostly from local fuel supplies, no shared borders and no cross-border transmission, and a long narrow transmission system.

“New Zealand electricity prices are driven by the local environmental and market conditions.”

Source: Stuff.co.nz

Apart from the ability to turn on your lights each evening, what else does your power company give you?

Genesis Energy are rewarding their residential customers for their loyalty by running rewards point system designed to give customers something in return just for paying for the energy they use!

Customers can gain points each month by using the online services, paying their bills by the due date, making payments by direct debit and helping Genesis to reduce their paper usage by opting to receive their bills online instead of in the post!

Brownie points are accumulated each month and can be used to treat yourself to books and magazines, household gadgets, music, toys, clothing and accessories and vouchers to many nationwide stores such as Farmers, Mitre 10 and Glassons!

Use Switchme.co.nz to find out if you could save money each month and earn rewards by switching to Genesis Energy and you’ll receive 3000 Brownie Points to get you started!

The new electricity regulator has advised an increase in customers switching electricity retailers and that the market has started to become more competitive.

Chief executive of the Electricity Authority Carl Hansen says the government campaign that encouraged households to shop around for a better electricity tariff has generated more interest than was expected when the campaign launched in May last year.

Energy retailer comparison services such as Switchme.co.nz saw a massive increase in customers searching for a cheaper supplier in July last year and switching power companies.

The amount of consumers switching energy suppliers is still on the increase despite the campaign advertising ending months ago, up 18.6 per cent by a year ago.

New offers by major electricity retailers designed to retain customers were a clear sign that power companies are starting to respond to increased consumer activity the authority said.

Hansen said recently that narrowing tariffs might make customers more “sticky” as benefits of switching retailers became fewer.

“You might expect to see are the headline tariffs converging, but there will be a lot more particular deals and tariff options that will offer good value”.

This proves that encouraging consumers to look for a better deal is forcing the electricity retailers to reward their loyal customers and offer better rates to boost their customer numbers.

The switching campaign will start up again this year and is expected to cause an even bigger impact on the household electricity market.

Visit Switchme.co.nz to find out if you could be getting a cheaper monthly electricity bill or call free on 0800 179 482 for advice.

If you are thinking of switching power companies, or perhaps you’re moving into a new home,  Meridian Energy offer great customer benefits as well as competetive prices.

Join Meridian when moving into your new home, and they will welcome you with a box of natural household products from Eco Store and some yummy Whittaker’s chocolate!

Sign up with Meridian Energy and you can also opt to receive a 6 month magazine subscription such as Cuisine Magazine or House & Garden, a 6 month Fatso DVD subscription or more of the fantastic Eco Store products for free!

Visit Switchme.co.nz to compare Meridian Energy’s power prices against what your current power company offer you, or give us a call on 0800 179 482 and we can talk you through a free energy comparison!

New Zealand owned power company Mercury Energy will be the first state owned enterprise to be privatised in the government’s plans to sell minority stakes in five SOE’s over the next three years.

Mighty River Power which trades as Mercury Energy in the electricity retail market has been considered as the most ready for sale of up to 49 per cent of its shares which will be sold on an open market. The government will remain with a minimum 51 per cent controlling stake.

Finance minister Bill English and SOE Minister Tony Ryall assured Kiwi’s that the part-sale would put New Zealanders “at the front of the queue” for share allocations and that no single share holder other than the government would be allowed to own more that 10 per cent of any of the companies that will be put up for sale.

They gave no clues as to which state owned company would be the next on the list for part privatisation, but have identified Meridian Energy and Genesis Energy, along with coal mining company Solid Energy and airline Air New Zealand as prime candidates for sale.

The timing of the sales will depend on market conditions and company circumstances the ministers advised.

Ryall has stated that the government will probably stump up around $100 million in fees to investment banks preparing the partial sell-down of the New Zealand owned power companies.

In a media briefing in Wellington he spoke about the mixed ownership model being a “very very big programme’ but he wouldn’t expect to pay hundreds of millions of dollars for it. It would be “more around $100 million”. That would work out to be around 1.8 per cent of the sale price, which is in line with the costs relating to the privatisation of Contact Energy in 1999.

Ryall had told Parliament’s Commerce Select Committee the Treasury’s range of fees would be between 2 and 9 per cent at the higher end of the scale. Treasury officials expect that Mighty River Power could raise as much as $1.8 Million.

Bill English talked down the threat  to the programme caused by volatile financial markets, saying the prospect of a steady return from utility companies was more attractive that other investment opportunities, and is a better method of clamping down on new government debt.

If you’re with Mercury Energy, now would be a good time to do an energy comparison and find a better deal. You will find a cheaper power company!

Finance Minister Bill English announces first SOE sale...

Source: yahoo.com/news

Are you with the most expensive power company? If not, do you know how much you could save each month if you switched to a cheaper company?

With over 15 different power companies throughout New Zealand, it is becoming increasingly difficult for households to keep track of which is the cheapest.

Many households are unaware how easy it is, and how much of a better deal there is to be had had by simply switching energy providers.

Power prices vary from region to region, and a retailer that is cheap in one town may be the most expensive in another. The prices are also changing regularly so it’s a good idea to keep one step ahead of any price rises.

Here are some examples of the extreme price differences in the electricity market for a typical 4 person household (single uncontrolled meter using 900kWh of electricity) per month. (30 days)

The above results were sourced from a New Zealand energy comparison website. Amazing to see just how much a small family could be over paying for their power, and could putting towards food for the Christmas table instead.

Everyday expenses such as food and electricity are constantly on the increase, everyone should be looking for a better deal for power and paying the least amounts as possible on household outgoings.

With Christmas just around the corner, now is the time to cut costs and save for a great family occasion. With a family of 4 potentially savings over $50 per month, electricity is a good place to start.

Why pay more for power than you need to? At the end of the day, no matter who your energy retailer is, the electricity supplied to your house comes from the same place: The national grid. At the end of the day, you’ll only be changing the logo on your electricity bill.

Visit Switchme.co.nz to see how much you could save for christmas!

Saving $50 per month = free turkey!

Prime Minister John Key has announced that New Zealand owned power companies Genesis Energy and Mighty River Power will probably be the first state owned enterprises to be sold under the mixed ownership model.

The two power companies are “likely to be the number one off the block” Key told Radio New Zealand in an interview this week, but he couldn’t confirm when the shares will be sold.

In June, the treasury advised that Genesis Energy and coal miner Solid Energy needed to be restructured to heighten their appeal for the partial privatisation programme.

The government is aiming to raise as much as $7 billion by selling minority shares in electricity retailers Genesis Energy, Meridian Energy, Mighty River Power, as well as coal miner Solid Energy and airline Air New Zealand.

The Prime Minister says that funds raised will be used to pay for new infrastructure projects.

The bulk of the money raised will come from Meridian Energy, which the treasury estimates could raise as much as $3.1 billion in a partial sale to private investors. Mighty River power is expected to raise $1.8 billion, while Genesis Energy could attract $780 million in a partial sale.

Treasury officials favour the partial privatisation in its regulatory impact statement over maintaining the status quo or the SOE’s issuing non-voting equity bonds and using holding companies.

Such a sell down would off little economic efficiency, and the biggest risk would be the perception of an implicit government guarantee.

Many consumers are worried about the effect that partial privatisation will have on their electricity prices believing the sales will cause increases.

State owned enterprises are set up to be profit driven businesses just like others in the private sector. By law, their principle objective is to be as profitable and efficient as comparable businesses that are not owned by the Crown.

Their only non commercial responsibilities are to be good employers and to accommodate the interests of the communities in which they operate.  In that effect, SOE’s operate in the public interest no more than private sector companies do.

No date for the sales has been set as yet. John Key states “My guess is no earlier that the latter part of 2012, but we will have to get advice on that”.

Source: Scoop.co.nz Stuff.co.nz

Powershop have come top of this year’s Deloitte Fast 50 index since doubling their customer base within the last twelve month.

The index which compiles and ranks the 50 fastest growing companies in New Zealand according to revenue growth over the last three years.

Powershop, which is an online subsidiary of state owned Meridian Energy, has the highest recorded growth rate in the 11 year history of the Fast 50.

The online electricity retailer Powershop prides itself on bringing innovation to the electricity industry and changing the way consumers are billed for their electricity.

A Deloitte spokesperson stated “They’ve really shown that courage, tenacity and innovative thinking can deliver outstanding success, even in a tough economic climate, by adopting a challenging mindset and not being confined to a conventional business model’.

Powershop allows you to buy electricity in their online shop, and have regular ‘Specials” on offer just like your local supermarket!  You choose which power to buy depending on whether you wish to buy ‘Green Power’ to help protect the environment or wish to buy in bulk to secure the best deal.

Monitor your electricity usage with Powershops’ online tools which allow you to track as and when you are using your power and budget accordingly.

Giving customers the variety to manage their own power bills has seen their growth rate of 5280 per cent award them the top spot of the Deloitte Fast 50.

Mobile network Two Degrees came second with a growth rate of 3762 per cent.

The benchmark for making the Fast 50 is a growth rate of 144 per cent or higher over the last three years and making the top 10 requires growth of at least 485 per cent.

Visit Switchme to see how much Powershop could help you save on your next household power bill.

Source: Stuff.co.nz

Small businesses may be paying too much for their electricity says Powershop chief Ari Sargent.

Sargent has advised that the savings to be made by shopping around for a cheaper power company can be quiet significant.

“In the work we’ve done over the last year we’ve identified that 98% of customers can save on average about 12%” he said.

“That’s quite significant if you are spending several thousand dollars a year”

Small businesses are the neglected sector of the electricity sector, however the commercial and industrial users are sought after customers as they use large loads of electricity and they tend to be able to afford tender processes.

Residential customers have been encouraged to shop around for power by the What’s My Number campaign launched by the government earlier this year, however small to medium businesses have been left out and unable to obtain a free electricity comparison for their power accounts in the past.

Energy retailer comparison service Switchme which launched in 2009, has helped thousands of residential customers save over $2 million dollars a year on household power bills, and is soon to be launching the same service for businesses.

Switchme is working on giving businesses the opportunity to compare their electricity accounts against other retailers and also the ability to switch to a cheaper supplier free of charge just as easily as residential customers are currently doing.

Source: tvnz.co.nz