TrustPower sees another 12 to 18 months of intense retail electricity market competition, created largely because Energy Minister Gerry Brownlee’s reforms are forcing SOEs to reshuffle their customer bases to cope with new generation load in the north and south islands. Real and virtual asset swaps will see Meridian seeking North Island customers while Genesis and MightyRiverPower are already seeking new customers in the South Island. With high customer satisfaction ratings and competitive online pricing, Meridian’s Powershop subsidiary looks an increasingly useful strand to Meridian’s customer acquisition plans.

TrustPower is predicting 100,000 South Island and 40,000 North Island electricity-customer switches between now and the middle of next year along with some swapped commercial and industrial accounts. After that, a “new equilibrium” is expected to emerge, ending almost three years of “unusually intense” retail electricity competition. TrustPower’s South Island customers are paying some of the highest margins in the country. To try and stave off competitors, the company has 75% of its high value customers on fixed term contracts.

- - -NOT A SUBSCRIBER? - - - - - - - - - - - - - - - - - - - - - - - - - - -

NZ’S LEADING INFORMATION SOURCE FOR ANALYSIS AND INTERPRETATION OF THE CRUCIAL ENERGY AND ENVIRONMENT ISSUES AHEAD.

NEW ZEALAND ENERGY & ENVIRONMENT BUSINESS WEEK
Powerful and up-to-date, it covers Emissions Trading Scheme, Climate Change & Carbon Trading, the Resource Management Act, the Kyoto Protocol, Energy Supply Security, Electricity Generation, Renewable Energy, Oil & Gas Exploration, Energy Efficiency, Water Management, Sustainability. Covers policy announcements, draft legislation, amendments to Acts and regulations. Also includes NZ Energy & Environment Weekly Digest. Published every Tuesday. 46 issues per year.

http://nzenergy-environment.co.nz/home/special-introductory-offer
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Contact Energy, meanwhile, has told equities analysts it is “impossible to compete” with a new offering in Dunedin from Genesis. Despite the competition, TrustPower echoes its competitors in expecting overall upward pressure on wholesale and therefore retail electricity prices to remain, although it has “moderated retail price uplift short term” and sees a permissive environment for price rises which don’t attract political attention.

Analysts are taking a similar view about the achievability Contact’s 5% tariff increase to three-quarters of its customer base, which kicks in this month, although Goldman Sachs JB Were says self-inflicted brand damage in 2008 continues to make customer acquisition a greater challenge for Contact.

 Copyright © Media Information Ltd
NZ Energy & Environment Business Week