New Zealand Labour Party

Overpriced prepay powering profits

Contact Energy is charging the poorest New Zealanders the highest electricity rates, ripping off those who can least afford it, Labour's Consumer Affairs spokesperson David Shearer says.

New figures obtained by Labour show Contact Energy continues to charge up to 38 per cent more for the power under its prepay schemes.

“People in financial trouble are often pressured to go on prepay schemes by power companies, so they are typically used by those already having difficulty paying their bills.

 “Prepay schemes are great for power companies, because payment is provided upfront in advance. With all financial risk eliminated power companies should be charging prepay customers less, not more than other customers.

 “The fact Contact continues to hit those least able to pay their bills is opportunistic and unfair.

 “Our children are suffering rheumatic heart disease, skin infections and life-shortening lung conditions because their families can’t afford to heat their cold, damp homes.

 “Meanwhile this month Contact Energy will be paying a 'special dividend' of $367 million to its shareholders. Some of those profits were made from consumers who are struggling to afford to heat their homes.

 “It’s pleasing however that two other pre-pay schemes – GloBug and Genesis – are now approximately the same as the standard rate of charging.

 “This is a marked change from a few months ago and shows these companies are have responded to the statistics I released last year.”