Episode 6: Improving consumer access and choice

In this episode, Carl speaks to Andrew Millar, General Manager Retail and Consumer, about the Electricity Authority Te Mana Hiko’s work to improve consumer access and choice. Together, they explore some of the barriers consumers face when accessing electricity and finding a plan that best suit their needs.  

They also discuss our Improving consumer access and choice issues paper, which invites feedback from consumers and industry on the issues we've identified. Alongside this, we're asking people who have struggled to get access to electricity or find a plan that works for their household to tell us about it. 

The feedback from the survey and the issues paper will help us build our understanding of the situation before deciding on changes.

We hope you’ve enjoyed listening. For more information, please visit ea.govt.nz 

The Electricity Brief is brought to you by the Electricity Authority Te Mana Hiko, an organisation responsible for the governance and regulation of New Zealand’s electricity industry. 

Find us on LinkedIn. 

Transcript

SPEAKER_01 0:06

Kilda, welcome to the Electricity Brief. Each of these issues we bring in a conversation with the people that are shaping New Zealand's electricity market. We talk about what's changing, why it matters, and what it means for you. Today we're joined by Andrew Miller, the General Manager of Retail and Consumer for the Authority, to talk us through the new improving consumer access and choice paper that's been released. Kyoto Andrew, it's great to have you with us today.

SPEAKER_00 0:31

Hi, Carl. It's great to be here.

SPEAKER_01 0:33

So, Andrew, tell us about the issues paper.

SPEAKER_00 0:36

Sure, Carl. The Electricity Authority wants an electricity system that works for everyone. However, we've identified that some consumers may struggle to get connected or to choose the right plan or retailer for them. In the Improving Consumer Access and Choice Consultation Paper, we've identified a range of barriers that consumers face. However, some of these barriers are not always apparent through our regular data collection or complaints process. So we're using this consultation paper to both get feedback from the industry and consumer advocates on what are these barriers and how they impact consumers, but also consumers themselves. We really want to hear those human stories, those human voices that enable us to build the right set of options that us, the industry and consumer advocates can all take forward to improve outcomes for consumers when it comes to accessing electricity.

SPEAKER_01 1:33

I understand that nearly 47,000 potential consumers had the applications for electricity supply declined due to credit issues last year.

SPEAKER_00 1:42

What does this tell us? Aaron Powell Well, Carl, there's around 2.3 million electricity connections in New Zealand. That's households and businesses and industry. So what that tells us is that for most consumers, they have their choice of electricity plan and can get access to electricity when they need it. But not everyone can. So this issues paper really is about identifying why those consumers are struggling and what are the barriers what are the barriers they face and what are the steps that we can take to improve their access so they can use electricity in a in a way that improves their lives.

SPEAKER_01 2:22

Think about those consumers that struggle to get connected or to access suitable plans. What do we know and understand about them?

SPEAKER_00 2:29

Well, we know for some consumers that credit history or credit worthiness can be a barrier. Those consumers may struggle to get access to a post-pay connection either because they have credit issues or maybe they don't have a credit history at all because they're a recent arrival in the country or have a connection for the first time. Those consumers can access things like a prepay service, or they can also potentially access a supply through a social retailer or through going through an advocacy group or a financial planner. Some consumers also struggle because of technological limitations. So we all have a meter in our homes that's the box on the side of the house or in the garage that communicates back and forth to your retailer every half hour or so about how much electricity you're using and what's going on with your electricity supply. Most of us have one of those that's called a smart meter and they're using the cellular network to communicate. But not everyone does. Some people have a have a smart meter, but it doesn't communicate well because maybe you're in a bad spot for connectivity, or some people have a legacy meter, the old-fashioned kind where someone has to turn up and do a physical read. If you have one of those meters, it means you might not be able to access things like a prepay connection or a time of use panel, some of the new innovations in the market, further reducing your choice. And these two issues, being able to access a connection through your creditworthiness and your limitations for your meter can come together. So if you struggle to get a connection because of your credit and you would like to do a prepay connection instead, if you don't have a smart meter, then you're unable to get access to a prepay connection. Which means your options are even more limited than they might otherwise be. It's important to recognize that access isn't just about whether an option exists on paper. It's whether someone can access it, afford it, and sustain it over time.

SPEAKER_01 4:22

Andrew, why is this issue such a priority for the authority?

SPEAKER_00 4:26

Well, Carl, as I said, uh the electricity authority wants an electricity system that works for everyone. And electricity is an important part of modern life. We use it to heat our homes, to feed our families, to work. And it isn't a problem if some consumers can't get access to electricity. That means they may not be able to benefit from uh work or life in a way that we would want them to. It's a really complex issue. Um it intersects issues like housing, healthcare, uh, financial inclusion. So it's important that we we move carefully uh through this process. There are some retailers who are doing really good work there, but we think there's more that the industry as a whole, regulators as a whole, and advocates as a whole can do to improve outcomes for consumers here. Really, it's important that consumers have a strong voice in this process. Being a strong and responsive regulator starts with listening. So really keen to hear from consumers themselves about the struggles they face to enhance the data that we have to generate the best set of options that we can to look at how we solve this problem.

SPEAKER_01 5:29

So thinking about those things, what's the role that prepay and social retailing might play here?

SPEAKER_00 5:36

Prepay is an option for some consumers. Think a bit like a prepay cell phone. You pay in advance and you have a certain amount of electricity that you can use, and then when it runs out, um it stops and you have to top it up again. And that can be great for people who um struggle to get a normal post-pay connection because of their credit history, or maybe um you're a new arrival in New Zealand, you don't have a credit history. Another option is something called social retailing. Those are specialist retailers who support consumers not only with an electricity supply, but with things like additional financial planning support or additional budgeting support. But those are both limited options. You need to have a communicating smart meter to order to have a prepay connection, and not all retailers offer them. Similarly, social retailing is limited in scale and located in certain regions only. So while these options are important and we want to help them grow, they're not the answer for everyone who may be struggling to get connected. Some retailers may also offer bonds or other alternative pathways, but those aren't standard either. And so, really, this process is about understanding all those barriers, all those options. Do they work, do they not? And then understanding what we can do collectively as industry, as regulators, as community advocates to look at a better set.

SPEAKER_01 6:52

Alongside the issues paper and the more formal consultation, I understand there's also an opportunity for consumers to participate directly in a survey.

SPEAKER_00 7:00

That's right, Carl. We want as many consumers to make their voice heard in this process as possible. And while we have our consultation paper that's suitable for industry or consumer advocates, we know some consumers will want something simpler and easier to engage with. So that's why we've developed this consumer survey. A few simple questions about the experiences they've had accessing electricity, any of the barriers they've faced, and any ideas for how to make it better in the future. This information is very important. It allows us to get the broadest data possible, the broadest insights possible, which will help us develop the best set of solutions for all consumers.

SPEAKER_01 7:34

Thanks for joining us today, Andrew. There's some really important work going on. It's been great to have you walk us through it. Thanks, Carl.

SPEAKER_00 7:39

It's been great to be here.

SPEAKER_01 7:40

And thanks for tuning in. If you'd like to review the Improving Consumer Access and Choice paper or make a submission, you can find that on the authorities website at www.ea.govt.nz. That's all for now. We'll see you again soon. Kakitiano