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Guidelines for electricity retailers working with low income consumers released

The Electricity Commission has developed guidelines for electricity retailers on how to work with low income consumers. These guidelines are advisory rather than regulatory, and are intended to provide choice for electricity consumers. They are designed to ensure that minimal disconnections occur, and set out a clear process for retailers to follow if a disconnection does have to take place.

Retailers are to offer consumers having difficulty paying their bills a number of alternatives to standard monthly billing. These alternatives include prepayment metering, smoothed payments, and redirection of income. Bonds can cause undue hardship, and should not be used unless certain circumstances (specified by the Commission) require the retailer to do so. The amount of the bond should not exceed $150, and should be refunded after twelve months of the consumer paying all bills on time.

Consumers with health and/or disability issues may face additional challenges if their power is cut off. The Commission defines these consumers as ‘vulnerable’, and advises that electricity retailers must have a process which enables vulnerable consumers to identify themselves to their retailers. This includes verification from a third party such as a GP, budgeting agency, or Work and Income. Vulnerable consumers should also be able to identify one or more preferred contact (including social agencies) who have agreed to assist them if disconnection is pending.

The guidelines have been developed to avoid causing unreasonable credit risk for electricity retailers. They are intended to be complemented by a protocol between retailers and social agencies. The Commission will monitor the performance of this guideline and if the uptake is not satisfactory, there may be a need to regulate.

CEA views the guidelines as a positive step towards ensuring a transparent, constructive relationship between low income consumers and their electricity retailer. Many low income consumers struggle to pay the cost of staying warm during colder months, but are able to meet this cost over a longer period of time under different payment options. The challenge for electricity retailers will be to implement these guidelines in a way that is user friendly for their customers.

To obtain a copy of the guidelines, click on the link below, or call the Electricity Commission at 04 460 8860.

PDF of Guidelines (65KB)