Mighty River Power first SOE to go
National plans to sell off 49% of Mighty River to private interests (this doesn't actually happen till 2013).
Mercury start to aggressively push customers onto Glo-Bug
Power firm forces people in debt onto pre-pay meter
The company, owned by state-owned Mighty River Power which the Government plans to float on the sharemarket after the election, has already moved 14,000 of its 270,000 Auckland customers on to a pre-pay system called "Glo-Bug".
Brian Rudman: Mercury's Glo-Bug bullies make me see red
"As your account is now in arrears, under clause 11.13 of our Mercury Energy Residential Terms and Conditions, we will exercise our right to move you to our Glo-Bug prepaid service 30 days after the date of this letter ..."
Ezi-Pay, which recruits corner stores for the service, sells it to shopkeepers as a happy hunting ground. "Glo-Bug customers, on average, top up 8 times a month," says the sales pitch, "offering Ezi-Pay retailers huge opportunities in terms of cross-selling and building a loyal customer base."
https://activata.co.nz/prepaid-power/
GLOBUG customers, on average, top up multiple times per month bringing considerable foot traffic to your stores.
I've recently become obsessed by GLOBUG. I think they've been complicit in a terrible cruelty from the public for years. A thread.
Ever heard of GLOBUG? Me neither. They don't advertise, or not to you and me, at least. They are the biggest pre-pay power provider in NZ.
They've been operating since 2011, when National was trying to sell Mighty River Power. Their initial customer base came from Mercury aggressively pushing 14,000 low-value customers onto GLOBUG.
We know that their distribution partner at the time advertised that GLOBUG customers topped up on average 8x a month.
"Nationwide, we would estimate there would be 100,000 to 150,000 homes that could benefit from a pre-paid service," Munro said.
GLO-BUG Ltd is registered:
https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/4400399
This suggests it was previously a business unit under Mercury.
Overall, this research shows prepayment metering consumers are at greater risk of fuel poverty than the general population. Rationing electricity consumption below requirements for maintaining health and wellbeing is a significant problem; yet despite this, self-disconnection remains a consequence of fuel poverty for many households. Government intervention could reduce the risks and capture the benefits of prepayment metering. Other policies could enhance housing energy performance and reduce fuel poverty. An approach to defining and measuring fuel poverty is indicated. Policy recommendations for reducing fuel poverty, with particular attention to prepayment metering, are developed from this research.
By 2012/2013 watch-bodies like @consumernz were warning about the unjust nature of pre-paid plans. People like @DrKimOS were publishing research about its effects on fuel poverty.
Prepaid power budgeting means families turn off heaters
The market is growing in New Zealand – there are about 40,000 households using prepaid power meters, three-quarters of which are with Mighty River Power's Globug.
Without the CSC, Globug is much less appealing. At full Globug price in Auckland, Wellington and Christchurch, customers pay 12 per cent to 22 per cent more than they would with the cheapest monthly-billed power. Genesis, with 3800 prepaid customers, charges 10 per cent to 11 per cent more for prepaid than for monthly power, Consumer NZ said.
Some customers have little choice about using prepaid power. More than 20,000 customers had their electricity cut off last year due to non-payment. A prepaid provider that does not perform credit checks can be their only solution.
Research showed consumers using prepaid power reported cold housing – 67.5 per cent said they were shivering on at least one occasion, and 57.2 per cent reported being able to see their breath condensing inside on at least one occasion in winter.
"Electricity companies are not required to report how often people disconnect, or for how long when they're on prepayment like they do for post-payment billing. "If more people who are disconnected for late or non-payment are moving to prepayment we won't be able to tell if prepay is fixing or hiding the problem of electricity disconnections as this information is not collected centrally."
Mighty River defends Globug after customers complain
However, he said Globug wasn't right for households metered for night rates on hot water, but low-end rental properties often were not. "Just as a basic power supply, which a lot of low income people have, it is cheaper."
EXCLUSIVE: HNZ & Globug combine to take advantage of people in poverty - The Daily Blog
Few of you will be surprised to know that most HNZ houses, and most low income housing are on night rate meters.
But for new Globug customers who don’t qualify for a community services card, rates were substantially higher. In Hamilton, a three- to four-person household could pay over $800 more on prepay than on Mercury’s cheapest post-pay plan. Prices in the other four centres were between 12 to 22 percent higher. Income limits for a community services card mean some households with relatively modest earnings won't be eligible for Globug’s discounted rates. For a single person, the income limit for a card is $27,637 a year before tax, for a couple it’s $41,327. The cap rises to $59,093 for a family of three and $67,282 for a family of four.
By 2015 there were news reports citing how bad things were: people shivering in their homes, paying much more than they would on post-plan.
Did I mention their close relationship with Housing New Zealand? In 2015 HNZ even put a GLOBUG advertisement in their newsletter, Close To Home. I can't find any statistics indicating how many HNZ houses are set up for GLOBUG but I suspect it is a lot.
More protection needed for prepay power customers: Consumer NZ
Father's power struggle after meter switch mix-up
"It emerged there is an unfortunate limitation of the Globug system and for him to have a controlled/night rate system, he would have to sign up with another power company then get his meter box converted back to its original state at a cost of $120 ... Housing New Zealand would support him having the power meter converted back," he said. The man said he had looked into switching providers but couldn't because of his poor credit history. The Globug spokeswoman said the company's technology was not compatible with controlled or uncontrolled metering configurations.
Winter energy payments enough to power all vulnerable households - Mercury
The company also observed that social welfare payments do not seem to have kept pace with the costs faced by low-income households.
Vulnerable electricity customers getting raw deal
Consumer NZ’s survey found 42% of Globug customers experienced poor service in the past year, the worst result of any power company. One in four Globug customers said they’d complained to the company about its service. Many of the company’s customers were also struggling to pay for power. Just over half had experienced financial difficulty in the past year with one in two borrowing from friends or family to meet power costs. Sixty-four percent had a household income of less than $50,000.
Getting off GLOBUG isn't easy, either. Their meters aren't compatible with controlled/uncontrolled metering so it'll cost you $120 to switch back. Disconnecting from GLOBUG counts as a black mark to Mercury, so they won't let you back onto post-pay. Competing power provider Genesis has a stand-down period for GLOBUG customers.
MBIE did a 13-month review of NZ's electricity pricing:
Electricity Price Review 2018-2019
Some of the poorest 10 per cent of households could be paying up to $3,000 a year more than others in the same income category
A last factor is a lack of competitive prices for some consumers on pre-pay meters, which often come with extra costs (fees for installation, inspections, topping up and closing accounts)
However, legislation prevents existing consumers from being disconnected without their consent.
There is a discernible correlation between total charges and increasing deprivation. After correcting for factors such as usage and network location, consumers in the most deprived meshblocks pay approximately $79/year more on average than those in the least deprived meshblocks.
Power charges are the next largest source of differences. Consumers in the most deprived meshblocks pay around $27/year more on average than those in the least deprived meshblocks.
Only 10 per cent of consumers in decile 10 incur any debt charges, but for these consumers the average debt charge is around $100/year.
the dataset indicates five per cent of consumers in decile 10 are losing $250 or more in prompt payment discounts each year.
This mixed pattern is unsurprising because the level of electricity usage is not a good predictor of deprivation. As shown in Figure 10, a sizeable proportion of consumers in the most deprived meshblocks have usage above 6,500 kWh per year (being the approximate threshold between those who pay less due the regulations, and those who pay more).
Overall, the analysis reinforces the observation from earlier studies that the low fixed charge regulations are not very effective at helping less well-off households.Some of these consumers benefit from the regulations, but others end up paying more. And for consumers in decile 10 meshblocks, the analysis to date indicates the two effects are similar in size.
However, this is unlikely to fully explain the 17 per cent of households in decile 10 meshblocks ( which are less likely to be holiday homes) that have low usage and are on a standard tariff option. At the other end of the usage spectrum, some households with relatively high usage are on low fixed charge plans. This will appreciably increase their bills.
MBIE commissioned a review of electricity pricing in 2018. They found, surprise surprise, that there was a correlation between total energy charges and economic deprivation. "Some of the poorest 10 per cent of households could be paying up to $3,000 a year more than others in the same income category"
any disconnection of a premise where a consumer is registered at that address and where the reason for disconnection is non-payment of account by that consumer(does not include instances where a consumer does not top up a pre pay meter)
Only disconnections that are manually initiated by the pre pay retailer are included in the disconnection data provided
The real killer, though, is that providers of pre-pay plans have never had to report on non-top-up disconnections. We literally can't know how many of their customers are regularly living without power.
In 2014-2015 there was a major reduction in disconnections, apparently as a result of MER pressure. My question is: how much of that reduction went off the books and onto pre-paid plans?
Family left out in cold after ditching provider
However, after disconnecting, Mercury declined to reconnect the family, saying it did not meet its credit criteria. Mr Lane said he had a clean credit record but had a black mark with Mercury for disconnecting from Globug. The family called Genesis Energy on June 2 asking to be connected and were told they passed the credit check but it would be June 10 before they could receive power, as the company had a stand-down period with Globug.
https://switchme.co.nz/meters-plans
A Controlled meter is typically paired with an Uncontrolled meter for dedicated energy supply to your water heating for anywhere between 8-20 hours per day and is "controlled" by the network during peak times to ease demand on the local grid. Night meters are a popular form of controlled meter, offering low rates for a fixed supply time of 11pm - 7am. As well as decreasing your water-heating usage, Controlled meter rates are much cheaper than those of a continuous supply meter, saving you money overall without affecting the hot water supply.
Prepaid power customers borrowing to pay bills, survey shows
A third of households on Globug prepaid power have had to borrow from family and friends to pay their bills, new data shows.
This indicates to me that the debt is actually being hidden.
Auckland woman living with her six grandchildren describes struggle of trying to pay the power bill