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Proposed Energy Reforms Turn Off Trust In New Zealand Government

Monday, February 17, 2020
NZ power market - proposed reforms

The latest research undertaken by leading online research agency, Opinion Compare, has found that while only 38% of the Kiwi population are aware of the proposed Government power reforms, 3 in 5 New Zealanders oppose the removal of prompt payment discounts (PPD’s) and low user tariffs.  Only 21% have trust in the Government proposal while 67% expect their power bills to increase as a result.

A national survey of n=1,159 people found that the removal of PPD’s and low user tariffs has sent heated waves of disapproval throughout New Zealand, with 60% having negative sentiment around the removal of PPD’s, and 63% negative towards phasing out low user tariffs. In particular, nearly three quarters of Kiwis who currently receive prompt payment discounts were negative towards the removal of them, while 76% of low energy users felt the same towards the phasing out of low user tariffs.

Aside from customer support, around three quarters of Kiwis rate low user tariffs and prompt payment discounts as their top 5 factors of importance when it comes to choosing an energy provider.  


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Table: Importance factors when selecting an energy provider

  1. Customer Support

80%

  1. Low User Tariffs

77%

  1. Loyalty Discounts

76%

  1. Prompt Payment Discounts

74%

  1. Renewable Energy

56%

  1. The energy provider’s environmental position

55%


Women seemed to express greater negativity of these proposed changes with 66% against the removal of low user tariffs and 63% against the phasing out of PPD’s. Driving the negativity amongst Kiwi’s is the expectation that power bills will soar – with 67% believing so. A sense of mistrust towards the Government has transpired as a result in that 50% don’t trust the Government with the reforms and only 19% thinking that what the Government is doing is positive. Interestingly, nearly half of Kiwi’s are confused about how these reforms will impact them personally.

In the midst of the reform announcements, Electric Kiwi is currently the energy provider of choice for New Zealanders. 70% of users believe they are getting the best value from them and for the quarter of kiwis likely to switch as a result of the reforms, they are more likely to switch to Electric Kiwi (40%), as well as Contact Energy (33%) and Meridian Energy (32%).

Gavin Male, Managing Director, said that “We always thought that some of the reforms wouldn’t be immediately popular.  When you make proposals based on factors that Kiwis have historically used in selecting their energy provider, there’s going to be backlash – which this research clearly demonstrates.  What’s more concerning is the high level of uncertainty out there.  It could be a lack of transparency coming from the government or the energy providers themselves, but with an expectation the proposed changes will hit their back pocket, the average New Zealander is going to be looking for better deals and also someone to blame should their bills increase.’

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