Consumers flee Contact

Contact Energy customers are taking their business to other electricity companies in the wake of its decision to increase its prices and the pool of money available for directors’ fees.

Electricity retailers yesterday reported a flood of inquiries during the past two days from Contact customers considering switching suppliers.

Many were from the South Island.

Meridian Energy reported a 200% increase in calls to its call centre on Thursday, a pace which continued yesterday.

TrustPower had 800 callers on Thursday inquiring about changing, equivalent to the normal volume of callers it received in a month.

A Genesis Energy spokesman said inquiries through its call centre on Thursday and Friday were nearly 50% higher than forecast.

Mercury Energy began its marketing push into Dunedin at 3.30pm on Thursday and confirmed its first customer in the city at 3.33pm.

Mercury retail manager Richard De Luca said an average Dunedin household would pay $200 less a year for its electricity than it would from Contact.

I’ve never been 100% convinced about the merits of competition for utilities because of the hassle involved in changing suppliers.

If I don’t like the service or price at one supermarket it’s easy enough to go to another. Changing power or telephone companies is more complicated and usually requires dealing with call centres which I approach with great reluctance.

However, this story proves me wrong, if customers are disgruntled enough with one electricity supplier they will go to the trouble of finding another. Only time will tell if they’re better off for doing it.

2 Responses to Consumers flee Contact

  1. Pete says:

    As a director of some 30 yrs standing of substantial private companies ( up to $100m revenue.) I am very discouraged about the quality of directors on these public utilities. I would not give Phil Prike the time of day. My personal view is that he is a blustering bully.Too many of these appointments are made from a political perspective, rather than from a commercial one.
    The way that this has been handled is very unprofessional. These directors have a fiduciary responsibility to act in the best interest of the company. Does Contact have a remuneration subcommittee of the board? Was any independent review conducted and was there an arms length recommendation? How can bringing the company into disrepute like this be in the best interest of Contact? Any dimwit could have foreseen the huge outcry that was going to follow.
    One director was filmed as saying he was worth the new fees. Well, sir, if you are not astute enough to handle this situation with a lot more finesse and and you can’t foresee the conflict that would arise out of this action in the current climate and against the price increases to customers, then you are clearly not worth your current fee, let alone an increase.
    I don’t have problem paying $1,100 dollars a day rate to someone who is worth it. The problem is too many of these people are bunnies and they can’t see ‘conflict of interest when it hits them in the face’.
    For what it is worth I am going to sell my shares in Contact. I don’t own a lot, but I am at the stage in life where I only want to invest in companies which fit my ethical standards in life. Mr Prike and his board fall a long way short of the mark. Sorry, but there it is. If I take a loss on them then ‘so what’ at least I won’t have to spend any time reflecting on these sorts fiascos.
    Well done Mr Prike you have successfully engineered a substantial loss of shareholder value. Great work.


  2. Pique Oil says:

    Changing energy company is actually very simple. The most important part is the ICP number, which will be on your electricity bill. They will do the rest for you. The biggest hassle for most is the survey company ringing to see whether you are happy with your new company and the changeover process, or why you changed company and what can be done better in future.
    If the hassle of dealing with a call centre is stronger than the outrage at your existing company, then the outrage is not that intense.


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