A power customer on a two-year fixed price contract says an email showing her daily power charge was set to double has left her feeling 'shocked'.
On January 28, Mercury Energy offered the Auckland woman a two-year low user plan, for a daily charge of 33.33c (plus a usage charge per kWh), which she accepted the next day.
But then on February 22 she received another email saying the daily fixed rate on her low user plan will increase from 33.33c to 66.66c from April 1, 2022.
It said the increase is due to a price update based on the costs of providing electricity and reflects the five-year phase-out of low fixed charge tariff regulations.
The woman told Newshub she's a "non-professional" on a low salary, who like many Kiwis, is struggling to meet the rising cost of living.
Having only two direct debits, the woman said while a price increase would have been easy for her to spot, some power customers could be caught out.
In a written response to Newshub, Mercury general manager customer, Craig Neustroski, said as the customer is on a fixed-term contract, she shouldn't have been notified of the April 1 price changes.
"The notification was our error and we have apologised to [the customer] and taken steps to ensure it doesn’t happen again," Neustroski said.
Around February each year, Mercury Energy reviews prices for customers that aren't on a fixed-term contract, he said.
As a result of changes to the 'low fixed charge plan', there will be an increase in the daily fixed charge, and a decrease in the per unit/variable rate.
"The increase to the daily fixed rate for customers reflects the phase out of low fixed charge tariffs, so will apply to anyone on open term pricing currently on this tariff," Neustroski added.
Low fixed charge tariff regulations were introduced to reduce power bills for low-use, low-income households. While they have helped some low-use households, others, such as low-income families with high energy use, were pushed into greater energy hardship.
The Government has announced low fixed charge tariff regulations will start to be phased out from April 1, 2022, over the next five years.
Acknowledging some customers will be negatively impacted by the change, Neustroski said it will remove the "excessive variability" in distribution network charges.
He expects removal of the regulatios will reduce "unnecessarily high" winter bills for customers and make a difference for the most vulnerable households.
Customers with questions could call Mercury Energy, which has payment plans, fixed price plans and energy monitoring tools available.
Luke Blincoe, chief executive at The Energy Collective Group, encourages power customers to compare prices regularly on websites such as Powerswitch.
They could also check Facebook and Google reviews for different power providers.
"The best tool is still fundamentally Powerswitch… the really important thing is to make sure you're getting the best price and the best service," Blincoe said, adding that choice of electricity provider does not affect the payment of the Entrust dividend.
