A confession

Written By: - Date published: 9:47 pm, July 14th, 2012 - 7 comments
Categories: Privatisation - Tags:

I joined Mighty River Power today.

They visited and offered me $150 incentive payment, no contract and a cheap rate guaranteed until April 2013.  So, I intend to use them through winter, use up my $150 credit, then switch back to powershop when their rates get lower again…

But couldn’t help wondering – am I part of a push to up their user numbers in preparation for sale?  So the numbers look good on the books, even if people (like me) might not stay?

What will happen to the share price when lots of users leave after the Government’s flogged 49% off?

7 comments on “A confession”

  1. Jim Nald 1

    Btw what is the “cheap rate”?

    From memory, some of the current rates are something like 33.3 cents/day (fixed charge) and 21.2 cents/kWh (variable usage charge).

    Do you also get an early payment discount, eg 10%?

  2. just saying 2

    That’s a ridiculously good deal.

  3. burt 3

    Bunji

    The test will be; If the 100% state owned power companies are more expensive and have the worst customer service will you stay with them out of principle ?

    [SOE power companies are 13% cheaper on average than private ones. Eddie]

  4. Lanthanide 4

    If I could get this deal, I’d swap.

    Just did some comparisons between Powershop and Mercury Energy: ME comes out ahead based on the past 12 months usage according to Powershop once I include the 10% prompt payment discount, however my powershop figures don’t include the weekend rebate. I estimate I’ve received about $80 in weekend rebates which puts Powershop ahead.

  5. Ed 5

    I have become very cynical about those TV advertisements with yellow sticky labels on peoples foreheads. Every time someone changes supplier they get a little warm fuzzy about ‘saving money’ – and indeed they may well get a lower rate until another supplier creates a lower price for that particular type of customer, or their new supplier puts up their prices. Whenever anyone changes supplier there is at least a little work in the new supplier coding something up, a little blip in telephone enquiries, and the old supplier being advised to delete a customer.

    But looking at the market overall, there is probably a little higher churn between suppliers (may be even a lot higher), but the cost of production of the service has not changed, and provided prices are changed fairly frequently (which seems to be the case), and are kept complicated enough that many households find it difficult to compare usage and costs from year to year, the industry as a whole can gradually change prices in this “oh so competitive” market. Is this more Theresa Gattung type spin? – make the market so complicated no-one really understands it, but spend money on TV ads saying how much money can be saved frequently enough and people will be fooled into thinking there is a real market . . .

    The ads are ether paid for by a government agency (corporate welfare) or by the energy companies (through electricity prices) Would we be better off with adult education or lower electricity prices?

    I will not use any part privatised electricity supplier – but will a lot of people doing that just encourage a the government to push through wholesale supply arrangements between companies which ensure larger profits to the private shareholders?

  6. Draco T Bastard 6

    And all the advertising and deals we see coming out all add to the actual costs driving prices up.

  7. lcmortensen 7

    Mighty River is losing customers at the moment according to MED data (down 1.0pc in 2011) – Contact and Trustpower are also losing customers (down 1.1pc and 0.4pc), while Genesis and Meridian are gaining (up 0.2 and 1.3pc). Which goes to show that people are preferring the SOEs over private companies for some reason – probably because they offer the cheapest prices without singing up to a five-year contract, getting your bill online, and paying by direct debit.

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