BusinessNZ Energy Council


Stronger regs, bolder thinking needed on energy hardship

May 27, 2021 | News (YEPN)

Stronger regulations coupled with a more proactive approach can do a lot more to alleviate energy hardship and reduce disconnections for non-payment, guests heard at an event organised by Young Energy Professionals and Power Women.

That requires some different ways of thinking about electricity, perhaps even considering access to it a human right, according to one panelist at the event hosted by Transpower in Wellington last night.

Kimberley O’Sullivan is a senior research fellow at the University of Otago’s Department of Public Health. She says electricity is already considered an essential service and people without it can suffer wide-ranging health effects.

“The most obvious one is death. That’s why we’re really concerned about medically dependent customers.”

This raises the fundamental question of whether access to electricity is a human right. O’Sullivan says housing is a human r ight and electricity is one of the six essential services that housing requires.

“There are good arguments for starting to have that conversation in this country and it’s a conversation that is starting to happen overseas.”

O’Sullivan notes that disconnecting customers during winter months is illegal in Europe and much of the United States and it is worth considering applying that to New Zealand.

“I think there is a tension in using a market structure to provide an essential service and that’s something everyone in this room grapples with.”

Compounding problems

FinCap policy advisor Jake Lilley, another speaker, notes that new consumer care guidelines do recommend against disconnections during the broad category of ‘weather events’.

He believes moving consumer care guidelines to a mandatory system will address part of the power imbalance in the existing system.

“There’s that tension here with companies with a profit motive and the power to disconnect people. I don’t think that’s particularly appropriate.”

“What we want to see is absolutely no-one being disconnected for an inability to pay. When you’re in an impossible situation that’s only going to make it worse.”

Lilley says that people struggling to pay their power bills tend to have a host of other problems.

Mounting debt leads to a “death spiral” for many that is increasingly hard to escape – and debt collectors make it even worse. Power companies must real ise that while many will contact them about their situation, people hounded by debt collectors are often afraid to answer the phone.

“We get real shockers quite often. People get chased for old loans, old telco debts, and that gets in the way of paying their own living costs,” he says.

“Debt collectors in th is country are not subject to targeted regulation that’s quite normal in parts of the world similar to us.”

Industry role

Electricity Retailers’ Association of New Zealand accessible energy advocate Miranda Struthers says the power industry has a big role to play but it cannot do it alone.

Housing quality, low incomes, inefficient appliances and low energy literacy all contribute.

“Retailers don’t want to disconnect anybody at all. But it is a tool to get people to pay their bills.”

“For us it would be better to engage them with services that can support them with things like budgeting.”

Struthers thinks the sector has honed its focus since the Electricity Price Report highlighted the problem.

Disconnections for non-payment halved between 2018 and 2020 to 3000 and retailers halted disconnections during Covid-19 lockdowns. ERANZ helped setup a power credit programme as well, providing 700 families with $120 credit.

Leapagatele Matuamaivanu Pei Helen Tua, community relations manager at Mercury, says achieving zero disconnections is feasible but there is a lot more work that needs doing.

Struggling families juggle many problems at once and talking to them to find out precisely what those are is critical to sorting out their power bills. “This matters if we have an outcome that shifts the dial.”

$2.5m for Maori Housing

The Government is rolling out several schemes to reduce energy hardship, often targeting housing.

Yesterday, Energy and Resources Minister Megan Woods announced $2.8 million to install solar panels and other renewable technology on 200 homes of Maori-owned rentals.

These will generate about 700 KW of solar electricity and provide cheaper power to more than 200 households, many using micro-grid solutions.

“Some of the projects will go even further by installing household batteries to store surplus electricity, replacing the use of diesel generators to build community resilience, and to trial innovative solutions to share power with others,” Woods says.

“Just as importantly, these projects will also provide us with valuable insights and data on how to best deploy renewable energy technologies to achieve the twin aims of combating energy hardship and increasing renewables generation in future.”

The scheme is part of a $14 million fund that prioritises projects intended to alleviate energy hardship among Maori.

Fifteen initiatives will receive funding in the fund’s first round , which is similar to a separate scheme setup for public housing.

Recent News