Consumer NZ says many households are paying the price for staying loyal to their power provider, with a lack of competition and consumer switching adding hundreds of dollars to annual electricity bills.
Powerswitch manager Paul Fuge said more than a million households are effectively paying a “loyalty tax” by remaining with the same power provider instead of taking advantage of competitive offers available in the market.
“You could be using the same amount of power as your neighbour, but you’re paying much more than them,” Fuge said.
He said that while many consumers assume power companies charge similar rates, this is not the case, with differences in pricing available across providers.
“Too many consumers — especially those that have been with their retailer for a long time — understandably assume their retailer will reward their loyalty and look out for them by letting them know when a better deal comes along.”
“To be fair, some do, but, unfortunately, not all.”
Fuge says energy retailers typically reserve their best pricing and promotional deals for new customers as incentives to switch providers.
He says electricity prices have climbed roughly 20% in the past two years, though consumers can still reduce costs by actively comparing plans and switching providers in a competitive market.