Waimarino power companies show poorly in contracts report

Ruapehu Bulletin, Volume 14, Issue 670, 21 January 1997, Page 1

Waimarino power companies show poorly in contracts report

Waimarino' s power com panies need to improve their domestic electricity contracts, according to a Ministry of Consumer Affairs (MCA) report. King Country Energy rated 1 4th out of the 36 New Zealand power companies* and Powerco rated 21st. * Not one of the country' s power companies' contracts were eompletely up to scratch. The report looked at seven criteria when rating contract performance. King Country Energy performed poorly against

the benchmarks in metering electricity consumption; its contract was established; its dealing with bonds; and in its disputes resolution processes. KCE met some of the benchmarks under its handling of disconnection and in the way it makes changes to customers' contracts. The company met most of the benchmarks in the area of liability. Powerco performed poorly against the benchmarks in all areas except the bonds and disputes criteria, where the company met most of the benchmarks under the disputes heading and some under the bonds

heading. "The contract is the primary mechanism for setting out rights and responsibilities and should reflect that," says MCA general manager Keith Manch. "Some companies have policies that take into consideration the issues that we have raised,but they arenot necessarily reflected in the contract." .MCA concerns were: • Some companies don't regularly test meters for accuracy and there was no recognition that the customer has the right to rely on the accuracy of the meter. "Instead some contracts

make the customer responsible for any additional unmetered consumption discovered by the electricity supplier". Almost all companies had undocumented or "in-

house" testing procedures. Most had no policy to replace worn out meters, with some unchanged since 1956. "Old meters run slow and Turn to Page 2

Power contracts need reviewing

FROM PAGE 1 this can mean that other customers are subsidising those with inaccurate meters." • Some do not pay interest on bonds or put bond monies into a separate trust account. • Some require customers to pay for power and services they haven't used, for example, power used before a customer moved into a property. • Almost all companies present their contracts on a take-it-or-leave-it basis with no room for negotiation. They also change contracts without discussion with customers. • Unfair disconnection: 'The customer should be assured that disconnection will not occur except for sound and appropriate reasons and not without reasonable warning." Some disconnect power if other services are not paid for, such as a purchase from an associated store, or if a relative residing at the customer' s property owes the supplier mone.y. • Liability for mistakes: Current contracts allow for the domestic customer to bear the cost of a company's failure to deliver good service. • Solving disputes: Contracts contain "significant barriers" to resolving deadlocked disputes and customers are not told about appropriate avenues for redress. The ministry favours self-regulation and the introduction of codes of practice to fix the problems.