Updating and strengthening
Draft
the consumer care
guidelines
Decision paper
under the Official Information Act 1982
15 January 2024
Released
Executive summary
Consumers are at the heart of everything The Electricity Authority Te Mana Hiko (Authority)
does. Electricity is a crucial service in our everyday lives and one that is helping us innovate
for future generations.
Consumers can and should benefit from a secure and reliable power system, have more
control over their energy use, receive a standard and consistent level of care from their
electricity provider, and have confidence that regulatory and policy decisions are informed by
accurate and up-to-date data.
Earlier this year we consulted on four options to strengthen and update the Consumer Care
Guidelines (Guidelines). These options ranged from maintaining the status quo to mandating
large parts of the Guidelines. We received over 1,000 submissions during the consultation
period, the large majority of which came from consumers, highlighting the importance of a
standard and consistent level of care to be provided by electricity retailers to their customers.
Subm Draft
itters largely supported our approach to strengthen consumer protections and agreed
that the voluntary nature of the Guidelines is not providing effective protection. On the whole,
submitters agreed that mandatory safeguards are required, but that the options presented
inadequately addressed the complexities of mandating the Guidelines and would not
produce the desired outcomes.
Acknowledging the initial options presented in the consultation were not entirely fit-for-
purpose, we have reevaluated our approach to ensure a robust and more nuanced approach
that prioritises the well-being of consumers.
The Authority has decided to replace the Consumer Care Guidelines and establish
mandatory minimum standards
In response to feedback and our commitment to improve consumer protections in the
electricity market, the Authority has decided to establish mandatory minimum standards to
replace the Consumer Care Guidelines.
However, before making the Guidelines mandatory, respondents have urged us to do a
thorough review and unpack what has worked well, and more importantly to resolve the
challenges that retailers have experienced in their implementation. This review is critical to
ensure the new requirements enhance consumer protections, improve clarity, and reduce
ambiguity and other issues imposing undue costs and inefficiencies in the electricity market.
under the Official Information Act 1982
This approach aligns with our additional objective and function to protect consumer interests.
This significant step forward aims to deliver better outcomes for consumers, especially the
most vulnerable, including those medically dependent on electricity. Establishing minimum
standards ensures an enforceable framework, promoting a consistent and supportive
standard of care for all New Zealanders from their electricity retailer.
Recognising retailers’ pivotal role, the Authority values their work done to ensure alignment
with the Guidelines. Their lessons learned from the implementation of the Guidelines will be
a key input into the development of mandatory minimum standards. Collaboration and an
Released
active engagement with the industry will be essential in developing effective, coherent,
workable, and enforceable obligations.
The Authority would like to thank all those who provided feedback on the Guidelines during
our consultation period.
Next steps
Our immediate focus will be to conduct an in-depth analysis of the Guidelines. This
examination will pinpoint existing challenges and areas for improvement. Subsequently, we
will reengage stakeholders to shape the future of consumer protections standards. We
recognise the importance of involving all stakeholders in this process and will be facilitation
workshop sessions to provide a platform for industry groups consumer advocacy groups and
other interested parties to have their say.
Following the engagement phase, we will begin the process to draft code amendments that
reflect the refined Guidelines and stakeholder views and carry out a cost-benefit analysis to
ensure regulatory framework achieves its objectives efficiently.
We intend to consult on the draft Code amendment and the cost-benefit analysis from end of
September to end of October 2024. We are committed to achieving full implementation by
the end of 2024 and will look to address issues outside of scope to the Guidelines in the
second half of 2024.
Draft
under the Official Information Act 1982
Released
Contents
Executive summary
2
1.
Purpose
5
2.
The Authority has decided to introduce mandatory minimum standards of
consumer care
5
3.
We sought to improve the Guidelines to address concerns about their
effectiveness
5
The Guidelines were introduced to address domestic consumer vulnerabilities
5
The Authority has gained an additional, consumer-focussed statutory objective since the
Guidelines were introduced
6
Our reviews have shown implementation has not been as consistent as expected across
the retail market
6
Draft
The Authority released a consultation paper seeking views on options to improve the
Guidelines
7
4.
Feedback revealed shortcomings with the proposed options
7
The scope of option two is too narrow to effectively address the issues with the existing
Guidelines raised in submissions
8
We consider Option three risks undermining the Guidelines as a whole
8
There are significant shortcomings with progressing Option four
9
5.
The Authority has decided to progress an alternative to Option four
10
The Authority will develop mandatory minimum standards for consumer protection 10
This approach will allow the Authority to address the issues raised in consultation
10
6.
Our desired policy objective of improving the Guidelines
11
Our statutory objectives drive our work and how our decision meets our statutory
objectives
11
Our stated policy intent
12
7.
Responses to matters raised in the submissions
12
under the Official Information Act 1982
Additional issues that are outside of the scope of the Guidelines will be addressed
following the creation of mandatory minimum standards
12
There is a wider consumer-care work programme to address additional issues
12
8.
Respondents also raised several other issues that were outside the scope of this
consultation 13
9.
Next steps in action: our year-ahead plan from policy to implementation
14
Released
10.
Attachments
15
Appendix A Submissions analysis
16
Consultation feedback demonstrated a need for the Guidelines to improve on consumer
protections and resolve workability issues
16
Submissions Analysis
16
Key Themes
17
Appendix B List of issues provided by respondents within scope of the Guidelines 23
Appendix C Consumer Care Guidelines Annual Alignment Statement Report 2022/23
34
1.
Purpose
1.1.
This decision paper seeks to:
(a)
Explain the Authority’s decision as a result of the consultation process from
the consultation paper Options to update and strengthen the Consumer Care
Guidelines.
Draft
(b)
Provide analysis of the stakeholder feedback gathered during the public
consultation, particularly focusing on the refinement of our approach on how
to reinforce consumer protections effectively.
(c)
Map out the way forward, outlining the Authority’s actions for the prompt and
effective implementation of the decision to increase consumer protections as
well as fixing existing issues.
2.
The Authority has decided to introduce mandatory
minimum standards of consumer care
2.1.
The Authority has decided to introduce mandatory minimum standards (Standards)
of consumer care within the Electricity Industry Participation Code 2010 (Code).
The Standards will replace the Consumer Care Guidelines (Guidelines).
2.2.
The Standards will largely be based on the existing Guidelines, and will aim to
provide clearer, more practical, and enforceable measures than currently exist. Our
goal is to offer comprehensive consumer-care protections, improve clarity and
mitigate potential costs or inefficiencies.
2.3.
By including these Standards into the Code, the Authority seeks to establish a
under the Official Information Act 1982
consistent and easily communicable regulatory framework for all electricity industry
participants to provide a consistent and supportive minimum standard of care for
New Zealand’s domestic consumers.
3.
We sought to improve the Guidelines to address
concerns about their effectiveness
Released
The Guidelines were introduced to address domestic consumer vulnerabilities
3.1.
The Authority published the Guidelines in March 2021, to support electricity retailers
to deliver a consistent and supportive minimum standard of care to all New Zealand
domestic consumers. The Guidelines replaced guidelines for assisting vulnerable
and medically dependent consumers, which had been introduced mid-to-late 2000s.
3.2.
The Authority decided that the Guidelines would be voluntary at the time of
publication. We also indicated that if voluntary guidelines did not satisfactorily
deliver their intended outcomes, we would consider mandating them (or aspects of
them) in the future.
The Authority has gained an additional, consumer-focussed statutory
objective since the Guidelines were introduced
1982
3.3.
On 31 December 2022, a new section 15(2) and 15(3) of the Electricity Industry Act
2010 came into force. It introduced a new additional objective, which requires the
Authority to protect the interests of domestic consumers and small business Act
consumers in relation to the supply of electricity to those consumers, specifically in
relation to the dealings of these consumers with industry participants.
3.4.
We were also given a new function, under section 16(1)(ia) of the Act, to undertake
Draft
measures aimed at protecting the interests of domestic and small business
consumers in relation to the supply of electricity by industry participants.
Our reviews have shown implementation has not been as consistent as
expected across the retail market
Information
3.5.
Our first review of retailers’ self-assessed alignment with the Guidelines for the
period 1 July 2021–30 June 2022 (published in June 2023) showed that retailers’
stated alignment with the Guidelines was variable, and implementation has not
been as consistent as we expected. This review showed us that retailers were
interpreting clauses of the Guidelines in several different ways. The result of this is
that the outcomes for consumers were likewise variable.
Official
3.6.
The Authority has recently completed the second review of retailers’ alignment with
the Guidelines. This is attached at Appendix C. In summary, the findings of this
report were that, while alignment has improved since the previous review, there
the
remains persistent partial alignment and non-engagement with the Guidelines from
small retailers.
3.7.
Consumer groups have expressed to the Authority on numerous occasions that the
Guidelines should be mandated to protect vulnerable consumers.
under
3.8.
The Energy Hardship Expert Panel Report1 also considered that the Guidelines, as
currently drafted and implemented, are not effective in delivering adequate
protections to consumers and that retailers may not be following them.
3.9.
The limiting nature of voluntary alignment, variable self-alignment responses,
consumer feedback, and retailers raising issues with ambiguity, indicated that the
Guidelines were not satisfactorily delivering their intended outcomes. Furthermore,
the Guidelines were introduced prior to the introduction of a consumer protection
Released
objective and function for the Authority.
1 https://www.mbie.govt.nz/assets/energy-hardship-the-chal enges-and-a-way-forward-energy-hardship-expert-
panel-report-to-minister.pdf, Section 9.2, page 109
3.10.
As a result of the above, the Authority decided to consult on options to update and
strengthen the Guidelines.
The Authority released a consultation paper seeking views on options to
improve the Guidelines
3.11.
The consultation paper was released on 4 September 2023, and sought feedback
on options to update and strengthen the Guidelines. The consultation period closed
Monday 2 October 2023.
3.12. The paper outlined the Authority’s view that the Guidelines could be strengthened
1982
and presented four options the Authority was considering:
(a) Option One: Maintain the status quo.
Act
(b) Option Two: Keep the Guidelines voluntary but clarify interpretation issues in
some areas. This option could be undertaken on its own or alongside options
three and option four.
Draft
(c)
Option Three: Codify (i.e. make mandatory) parts two, six, seven, and eight
of the Guidelines. These parts provide key consumer welfare protections
around financial difficulty, disconnection, and medically dependent
consumers.
(d) Option Four: Codify parts one to nine of the Guidelines.
Information
3.13.
Options three and four also included resolving interpretation issues as described in
Option two.
3.14.
The Authority outlined Option three as its initial preferred option. It was the
Authority’s view that this option would protect the interests of domestic consumers
facing financial difficulty, disconnection, and medically dependent consumers. We
Official
also considered this would minimise any potential negative impacts on innovation,
competition, and efficiency – considerations which align with the Authority’s
statutory objective. the
3.15.
The consultation paper sought feedback from stakeholders on these options and
the Authority’s initial assessment of how best to achieve the Guidelines’ purpose
and intended outcomes. This decision paper is the outcome of that consultation.
4. Feedback revealed shortcomings with the proposed
under
options
4.1.
We received a substantial number of responses to the consultation paper. In total
there were 128 formal submissions and nearly 1000 responses to our online
consumer survey. A summary and analysis of the submissions received is attached
at Appendix A.
4.2.
After carefully considering the feedback received, it has become evident that none
Released
of the presented options – Options two, three and four – stand as a fully suitable
solution to update and strengthen the Guidelines going forward.
The scope of option two is too narrow to effectively address the issues with
the existing Guidelines raised in submissions
4.3.
Option two proposed to keep the Guidelines voluntary but amend their wording to
address issues noted by stakeholders about varying interpretations of parts of the
Guidelines. Examples given in the consultation paper included:
(a) the definition of a ‘severe weather event’
(b) when a disconnection could be interpreted as endangering the wellbeing of
the customer or any customer at the premises (clauses 66(c), and 73(a)(i))
1982
(c)
what ‘reasonable’ means in various parts of the Guidelines
(d) any other wording raised by stakeholders through this consultation that needs
Act
clarification but does not significantly amend or extend the Guidelines.
4.4.
As shown in Appendix B retailers outlined substantial challenges tied to the
Guidelines, including clarity, workability, and even cost/effectiveness concerns. The
Draft
need to eliminate ambiguities, inconsistencies and anomalies emerged as a
common theme.
4.5.
Feedback revealed that Option two would be a significantly more substantial
undertaking than originally anticipated. This is because the number and magnitude
of issues reported with the current Guidelines is a lot more complex than simply
amending the wording in the Guidelines (as was proposed in the consultation
Information
paper).
4.6.
We have concluded that it is important that the concerns raised by retailers are
effectively addressed before minimum standards are introduced. Industry
participants have also stressed the importance of a collaborative approach to
resolve these complexities, emphasising the need for comprehensive resolution to
Official
ensure robust consumer protections.
4.7.
This option would only be feasible if the issues raised by respondents were
primarily minor wording issues regarding interpretation. Given the range and
the
substance of issues raised with the Guidelines by respondents, and the scope of
these being beyond that proposed by Option two, we consider this option would not
achieve the desired outcomes.
We consider Option three risks undermining the Guidelines as a whole
under
4.8.
Option three proposed to codify (make mandatory through the Code) parts two, six,
seven, and eight of the Guidelines.
4.9.
Our initial preference for Option three was grounded in our belief that making these
parts mandatory would effectively mitigate harm to domestic consumers. However,
after reflecting on the submissions received, the Authority’s position on this has
changed. The Authority now considers that having some parts of the Guidelines
mandatory, and others voluntary, will create significant issues that will undermine
Released
the effectiveness of the Guidelines as a whole.
4.10.
While respondents agreed that parts, two, six, seven and eight of the Guidelines are
the parts that prevent greatest harm from occurring to consumers, consumer
advocacy groups commented that this option would create significant shortfalls in
the protections provided. This means that the harms occurring to domestic
consumers could not be prevented if these are the only parts made mandatory.
4.11.
For example, many consumers and consumer advocacy groups mentioned how
part nine (Fees and Bonds) is critical for consumers. Part four (When a customer
signs up or is denied a contract) and part five (Business-as-usual accounts
management) were also highlighted as foundational aspects of the Guidelines that 1982
provide adequate protections for Consumers.
4.12.
Some parts of the Guidelines contain important foundational processes such as
information and records (part three) and the business-as-usual account
Act
management (part five). These parts are essential for realising the desired
outcomes of parts six, seven, and eight and their consistent implementation.
4.13.
After further consideration, we have also concluded that Option 3 could
Draft
inadvertently reverse the progress made by some retailers who have implemented
the entire suite of Guidelines. A segmented approach might create perverse
incentives, leading retailers and new entrants) to prioritise compliance with
mandatory parts while overlooking the voluntary components.
4.14.
In essence, the Authority’s view reflects the need for a more nuanced perspective
Information
than Option three, recognising the interdependence of the Guidelines and a
cohesive, comprehensive regulatory framework.
There are significant shortcomings with progressing Option four
4.15.
Option four proposes to codify parts one to nine of the Guidelines. This option was
favoured by consumers and consumer groups. These groups expressed concerns
Official
that the voluntary nature of the Guidelines leads to consumer harm due to
inconsistent retailer adherence, especially for vulnerable groups.
the
4.16.
Many consumers submitted that the key benefits of mandatory Guidelines will:
(a) reduce variability in outcomes, ensuring a consistent and reliable quality of
service as well as safety for vulnerable consumers (such as those who are
medically dependent on electricity)
(b) allow the Authority to enforce the consumer protection standards as they will
under
be Code obligations.
4.17.
Stakeholders in general supported mandating the Guidelines, however, some
(particularly those from industry) expressed that an adequate option requires
improvements in clarity, coherence, consistency, and enforceability.
4.18.
Retailers opposed Option four, citing the need for significant changes to the current
Guidelines to improve workability. Consumer advocacy groups also stressed the
need for the Guidelines to be better aligned to the Authority’s statutory objectives.
Released
4.19.
Based on the feedback received, the Authority believes the Guidelines need to be
thoroughly examined to address the various issues raised in submissions before
they can be made mandatory. As noted above, retailers provided the Authority with
a large number of issues with the Guidelines – included as Appendix B.
4.20.
However, as discussed above, the scope of any changes to the Guidelines
proposed by Option two (and thereby included in Option four) is too narrow for the
Authority to include in this process. This is particularly true if the conclusion of any
further analysis is that some clauses of the Guidelines should be removed and/or
significantly altered.
5.
The Authority has decided to progress an alternative
to Option four
1982
5.1.
Considering the feedback received, the Authority believes it is imperative to explore
a fit-for-purpose alternative that better aligns with our policy objective than the
options consulted on in the consultation paper.
Act
5.2.
This alternative will maintain the principle of Option four but will include a greater
examination of the existing Guidelines to address issues greater than purely those
of interpretation and clarity.
5.3. Draft
Pursuing an alternative also allows us to address the various concerns raised by
stakeholders as a part of the process of mandating the Guidelines, offering a
practical and efficient solution that includes the views of both consumers and
retailers.
Information
The Authority will develop mandatory minimum standards for consumer
protection
5.4.
The Authority considers the best approach forward is to develop a set of mandatory
minimum standards for consumer protection (Standards) within the Code, based on
the Guidelines.
Official
5.5.
These Standards will aim to address stakeholders’ concerns and create workable,
practical, and enforceable standards that ensure consistency of outcomes for
consumers without creating unnecessary costs or ambiguity. The Authority believes
the
this approach will ensure clear service standards for retailers are set, while also
facilitating effective monitoring and enforcement.
5.6.
While this is a new approach, it is strongly informed by the options in the
consultation paper and does not entail recreating the Guidelines. The Guidelines
will form a foundation of the new Standards, which will be refined through the
under
experiences of consumers and insights provided by retailers who have implemented
the Guidelines.
This approach will allow the Authority to address the issues raised in
consultation
5.7.
This approach will require the Authority to rigorously analyse the Guidelines in light
of the feedback received in submissions. This will build on our earlier analysis of the
Guidelines and will allow us to engage with industry groups and consumers to
Released
inform the design of the Standards.
5.8.
We believe this approach will best achieve the desired policy objectives and update
the Guidelines in line with the Authority’s statutory objectives – particularly the
additional objective. This option will also ensure the Authority addresses the views
of both consumer facing and industry facing stakeholders, which is likely to have the
effect of creating shared commitment across the board to enhance consumer
protections.
6.
Our desired policy objective of improving the
Guidelines
1982
Our statutory objectives drive our work and how our decision meets our
statutory objectives
6.1.
The consultation paper presented our desired policy objective as ensuring that the
Act
Guidelines’ purpose and intended outcomes are consistently being delivered, in line
with the Authority’s statutory objectives. Our main policy objective is to enhance
consumer protections in alignment with our statutory objectives.
6.2. Draft
In considering whether any changes are required to ensure that the purpose and
intended outcomes of the Guidelines are being consistently delivered, we need to
ensure the Authority acts consistently with its statutory objectives:
(a) to promote competition in, reliable supply by, and efficient operation of, the
electricity industry for the long-term benefit of consumers (the main objective)
Information
(b) to protect the interests of domestic consumers and small business consumers
in relation to the supply of electricity to those consumers (the additional
objective) – the additional objective applies only to the Authority’s activities in
relation to the direct dealings of industry participants with domestic consumers
and small business consumers.
6.3.
As the minimum standards will largely be based on the Guidelines, the Authority’s
Official
view is that they promote the additional objective, and they are not inconsistent with
the main objective. In addition to being consistent with the statutory objectives, the
minimum standards would need to be necessary or desirable to do so in order to
the
promote the protection of the interests of domestic consumers in relation to the
supply of electricity to those consumers. This is because section 32 of the Act
provides that the Code can only contain provisions that are consistent with the
objectives of the Authority, and are necessary or desirable to promote any or all of
the following:
under
(a) Competition in the electricity industry.
(b) Reliable supply of electricity to consumers.
(c)
Efficient operation of the electricity industry.
(d) Protection of the interests of domestic consumers and small business
consumers in relation to the supply of electricity to those consumers.
(e) Performance by the Authority of its functions.
Released
(f)
Any other matter specifically referred to in the Act as a matter for inclusion in
the Code.
Our stated policy intent
6.4.
We received feedback from a submitter that the “guidelines do not adequately meet
the Authority’s new objective. First, there are significant shortfalls in the protections
they provide for consumers. Second, the guidelines’ intended outcomes are aimed
at achieving a “balance” between consumer and retailer interests, which we believe
conflicts with the protection function mandated by the act.” A legal opinion was
obtained to support the submitter’s view that such a “balancing” approach as
outlined in paragraph 4.3 of the consultation paper was inconsistent with the
Authority’s objective in section 15(2) of the Electricity Industry Act 2010. We note
1982
that this argument has been supported by other consumer advocacy groups as well.
6.5.
In response to the first comment, the Authority is of the view that the Authority’s
decision to introduce mandatory minimum standards following a consultation Act
process with stakeholders will help the Authority understand how the protections in
the Guidelines can be refined. In response to the second comment, the Authority’s
intention was to confirm that it has taken into account its main objective of
Draft
promoting a competitive, reliable and efficient electricity industry as well as the
additional objective when considering how the proposal impacts consumers as
consumers are referenced both in the main objective and the additional objective.
7.
Responses to matters raised in the submissions
Information
7.1.
The Authority acknowledges the vast number of issues raised in this consultation,
many of which relate to the content of the Guidelines. These are outlined in
Appendix B and will be addressed in conjunction with developing the Standards.
We acknowledge that addressing these matters is vital to resolving current
ambiguities and impracticalities present in the Guidelines.
Official
Additional issues that are outside of the scope of the Guidelines will be
addressed following the creation of mandatory minimum standards
the
7.2.
The Authority considers progressing the strengthening of consumer protections a
priority, and therefore the creation of mandatory minimum standards for consumer
care within the Code. The Authority will therefore prioritise the process of redrafting
the Guidelines into these mandatory minimum standards in early 2024 and will
consult with stakeholders in due course.
under
7.3.
The issues that lie beyond the scope of this consultation, presented in the section
above, will be considered further with an aim to include them in our work
programme starting the second half of 2024.
There is a wider consumer-care work programme to address additional issues
7.4.
While the Authority will prioritise the process of redrafting the Guidelines into
mandatory minimum standards, issues raised that are outside the scope of this
Released
consultation will be addressed after the conclusion of the creation of mandatory
minimum standards.
7.5.
The Authority notes work is being done on several concurrent work programmes
that may address some of these issues. The outcomes of these workstreams will be
considered ahead of revisiting out-of-scope issues from the Guidelines consultation.
These workstreams include:
(a) Improving the Authority’s collection of retail data – which will provide the
Authority with substantial data on consumer debt, disconnections, complaints,
and other issues. This will allow the Authority to make more informed
decisions and improve monitoring of how retailers are treating their
customers.
(b) Designing an updated registration form and emergency response plan
to assist medically dependent consumers – the Authority is working with
1982
Te Whatu Ora Health New Zealand on a project designing an updated
registration form for medically dependent consumers and an updated
emergency response plan to assist medically dependent consumers in Act
emergency situations – such as planned or unplanned outages. The outcome
of this project will inform the overall review of the Guidelines.
(c)
Options to support consumer plan comparison and switching – the
Draft
Authority is considering a range of options for the best means to support
consumers to compare and switch electricity plans and retailers. This will
canvass several options, including forms of website delivery and supporting
services, including an option regarding requirements for retailers to provide
best plan comparisons of their own products.
Information
8.
Respondents also raised several other issues that
were outside the scope of this consultation
8.1.
A number of other issues were raised, many of which were outside the scope for
the Authority to consider with regards to the objectives of this consultation. The
Official
Authority will consider the issues, discussed below, after resolving the outcome of
this consultation.
the
Processes and fees for disconnection and reconnection
8.2.
Most consumers and consumer advocacy groups emphasised the importance of
addressing fees and bonds (part nine of the Guidelines, which were proposed to
remain voluntary under Option three). These respondents raised concerns around
the lack of mandatory rules governing bonds and fees, and how this could lead to
under
excessive costs of electricity.
8.3.
Of particular concern was the processes and fees around disconnection and
reconnection, where respondents highlighted that these create significant equity
issues for low-income householders that are the most likely to face disconnection
due to non-payment. Several consumer advocacy groups asked for these fees to be
banned.
8.4.
The Authority will need to conduct further analysis on this issue. The banning of
Released
disconnection and reconnection fees is a complex issue that would require its own
analysis and consultation. Of note, the Guidelines currently indicate that fees should
be reasonable (paragraph 109 of the Guidelines), but there is likely not a common
understanding of what this entails. This issue may be addressed in part through the
creation of mandatory minimum standards for consumers.
The Guidelines’ approach to pre-pay plans
8.5.
Submitters commonly raised matters of equity issues regarding pre-pay electricity
plans. Consumer advocacy respondents suggested that the Authority should
address the disparities in tariffs and fees across prepay plans.
8.6.
Most consumer advocacy groups highlighted the lack of information around prepay
disconnections. These respondents also suggested the Authority should collect and 1982
publish data on pre-pay plans and the varying associated costs.
8.7.
Further information would be required before the Authority could address these
Act
issues. As with the issue of disconnection and reconnection processes and fees
above, this is also a complex issue that is outside the scope of the current
Guidelines and will need further analysis.
Infor Draft
mation and enforcement
8.8.
The vast majority of consumers, consumer advocacy groups, and retailers
suggested that the Authority should invest in collecting and publishing greater
information and insights on the residential electricity sector.
8.9.
Consumer advocacy groups also suggested that greater monitoring of the retail
Information
sector is necessary to enforce the Guidelines – particularly if parts of the Guidelines
remain voluntary.
8.10.
The Authority is currently undertaking a work programme to increase the amount of
retail data available to improve our monitoring functions.
Other matters
Official
8.11.
Other matters raised in individual submissions included:
(a) protections for consumers experiencing family violence
the
(b) expanding protections for consumers using alternative energy sources such
as solar panels
(c)
extending the Guidelines to include protections for small businesses as well
as consumers.
under
9. Next steps in action: our year-ahead plan from policy
to implementation
9.1.
Detailed analysis – our immediate focus involves conducting an in-depth analysis
of the Guidelines. This examination will pinpoint existing challenges and areas for
improvement. Analysis will take place January-February 2024.
Released
9.2.
Stakeholder engagement – we recognise the importance of involving all
stakeholders in shaping the future of consumer protection standards. Active
engagement will involve workshop sessions, providing a platform for industry
groups, consumer advocacy groups and other interested parties to have their say.
Stakeholder engagement will take place March-April 2024.
9.3.
Code drafting process – following the engagement phase, we will begin the
process to draft code amendments that reflect the refined Guidelines and
stakeholder views. This stage involves translating the identified standards into
actionable and enforceable provisions within the Code. We intend to finalise the
drafting of the Code amendments by August 2024.
9.4.
Cost-benefit analysis – to assess the impact of our proposed changes, a
comprehensive cost-benefit analysis will be undertaken. This analysis aims to
1982
estimate the net benefits from implementing the mandated minimum standards for
consumers. By weighing the costs against the anticipated benefits, we can ensure
the regulatory framework achieves its objectives efficiently. We expect to have a
Act
cost-benefit analysis completed by the end of September 2024.
(a) We intend to consult on the draft Code amendment(s) and the cost-benefit
analysis from end of September to end of October 2024.
9.5. Draft
Monitoring and enforcing mechanisms – in order to achieve full implementation
fo the Standards by the end of 2024, we will need to establish effective monitoring
and enforcement mechanisms to implement the Standards.
9.6.
Issues outside of scope to the Guidelines – the Authority intends to begin work
on issues outside of scope of the Guidelines in the second half of 2024, once the
Information
mandated minimum standards work programme is settled from a policy perspective.
10. Attachments
10.1.
The following appendices are attached to this paper:
Official
Appendix A Submissions analysis
Appendix B List of issues provided by participants within scope of the Guidelines
the
Appendix C Alignment Report
under
Released
Appendix A
Submissions analysis
Consultation feedback demonstrated a need for the Guidelines to improve on
consumer protections and resolve workability issues
A.1. Feedback to the consultation was significant and came from a wide range of
stakeholders. Overall, the feedback we received demonstrated the need to
significantly update the Guidelines. The submissions are published on the Authority’s 1982
website.2
Submissions Analysis
Act
A.2. The Authority received 128 written submissions from respondents listed in Table One
below, including:
(a) 100 from consumers
Draft
(b) 12 from consumer advocacy groups
(c)
One social agency
(d) One disputes scheme
(e) One electricity distributor
Information
(f)
11 electricity retailers
(g) One research organisation
(h) One electricity retailer association
A.3. The Authority also received eight submissions from school children, who articulated
the importance of electricity to everyday life and the need for New Zealanders’ access
Official
to electricity to be protected. We noted these submissions, but they were not included
as part of our formal submissions analysis (and do not feature in Table One below).
A.4. The Authority also received nearly 1000 substantive responses to the online
the
questionnaire, primarily from individual consumers.
Table One: List of submitters to the consultation paper by category
Category
Submitters
under
Consumer advocacy groups Anglican Advocacy, Child Poverty Action Group, Citizens
Advice Bureau, Common Grace Aotearoa, Community Law
Centres o Aotearoa, Consumer Advocacy Council,
Consumer NZ, Disabled Persons Assembly NZ,
Presbyterian Support New Zealand, The Salvation Army,
New Zealand Council of Christian Social Services, Electric
United Community Action Network
Released
Social agencies
FinCap
2 Improving the Consumer Care Guidelines | Our consultations | Our projects | Electricity Authority (ea.govt.nz)
Disputes scheme
Utilities Disputes Limited
Electricity distributor
Wellington Electricity
Electricity retailer
Contact Energy, Electric Kiwi, Electricity Networks
Aotearoa, Entrust, Genesis Energy, Independent Retailers,
Mercury, Meridian Energy, Nova Energy, Octopus Energy,
Genesis
1982
Research organization
He Kāinga Oranga
Electricity retailer
Electricity Retailers Association New Zealand (ERANZ)
Act
association
Social Enterprise
Toast / Sustainability Trust
Key Draft
Themes
A.5. Five main themes emerged from submitters responses to the consultation paper.
These themes encapsulate the major feedback we received from respondents and as
such have presented our summary of the feedback through them. These themes
have provided a base to the Authority’s decision to progress creation of a mandated
Information
minimum standards.
A.6. These themes are:
(a) The existing Guidelines fail to adequately protect consumers.
(b) Mandatory minimum standards are necessary to increase consumer
protections.
Official
(c)
The current Guidelines require significant improvement to become
workable. the
(d) Retailers are unable to estimate possible impacts of mandatory Guidelines
without knowing what changes will happen.
(e) Compliance monitoring requires substantial enhancement.
Current Guidelines fail to adequately protect consumers
under
A.7. Respondents largely agreed that the Guidelines fall short of their purposes and
intended outcome. As shown in Figure 2, the vast majority of consumer submissions
agreed with the Authority’s view that the Guidelines are not delivering on their
intended purpose or outcome.
A.8. Many consumers submitted that retailers are not following the Guidelines with several
submitters stating that the voluntary nature of the Guidelines enables this to happen.
Several consumers highlighted retailers being able to not follow the Guidelines
without any repercussion means consumers are not adequately protected and are
Released
being harmed under the status quo.
Figure 2: Q1. Do you agree or disagree with our view that the Guidelines are not
delivering on their purpose or intended outcomes? Please provide any supporting
evidence
1982
Act
Draft
A.9. The online survey showed consistent responses to the written submissions. Table 5
summarises the most common responses on why respondents believe that the
Guidelines are not delivering on their purpose and intended outcome.
Information
Do you think that the Guidelines are currently delivering on their purpose and
intended outcomes? Can you tell us more to support your answer?
“No, the Guidelines are not currently
Official
delivering their intended outcomes”.
“The Electricity Authority’s own review
showed that retailers are not
the
consistently following the Guidelines”.
“That is causing harm to consumers”.
“The Electricity Authority should
commit now to codifying and
under
strengthening all protections in the
Guidelines as fast as possible”.
A.10. Retailers, however, overall support the Guidelines, and emphasise the positive
outcomes that the Guidelines have had for consumers. Some of the retailers’
responses added:
(a) Electricity Retailers' Association of New Zealand stated: “The independent
retailers support the Guidelines. The independent retailers consider the
Released Consumer Care Guidelines have an important role in articulating the
Authority’s expectations about retailer conduct and how to protect the
interests of consumers”
(b) Meridian stated: “Meridian supports codification as we support better
outcomes for consumers. It also seems clear that the Guidelines, as
originally drafted by the Authority, were intended to eventually become
Code at some point.”
(c)
Electricity Networks Aotearoa (ENA) stated: “ENA and its members support
the Consumer Care Guidelines (Guidelines) as they are a vital tool for
ensuring and enshrining welfare protections for domestic consumers.”
(d) Genisis stated: “We would also note that variable retailer alignment, cited
as one of key reasons for considering mandating the Guidelines, can result
from issues or ambiguities in the wording of the Guidelines resulting in
1982
variable interpretation, rather than reflecting genuine lack of alignment that
could drive a suboptimal customer outcome”
A.11. However, many retailers highlighted that there is a strong need to update and Act
strengthen the Guidelines to ensure these are workable and better provide adequate
protections to consumers.
Minimum mandatory standards are necessary to increase consumer protections
A.12. Draft
Respondents largely agreed that the Guidelines fall short of their purpose and
intended outcomes. As shown in Figure 2, the vast majority of consumer submissions
agreed with the Authority’s view that the Guidelines are not delivering on their
intended purpose or outcomes.
A.13. As shown in Figure 4, while consumers agree that parts two, six, seven and eight are
Information
important, they view that making all parts of the Guidelines mandatory is necessary to
deliver adequate protections for consumers (noting that existing shortfalls in the
Guidelines will be addressed).
A.14. While all the consumers and consumer advocacy groups expressed their support for
making all the Guidelines mandatory, industry participants highlighted risks and
possible unintended consequences of this option without first addressing issues with
Official
the Guidelines. Three quarters of industry respondents said that options three and
four might not be likely to add any extra benefits for those consumers who already
have a retailer who is fully compliant. Nearly 25% of industry respondents added that
the
the benefits of mandating some or all parts of the Guidelines can be outweighed by
the potential cost increased caused by the additional obligations.
under
Released
Figure 1: Q7: Do you agree that parts two, six,
seven and eight are the parts of the Guidelines Figure 2: Question 15: What do you think the
preventing the greatest harm from occurring
benefits to domestic consumers will be under
to domestic consumers?
options two to four?
100
100
90
90
80
80
70
70
60
50
60
1982
40
50
30
40
20
30
10
per respondent 20
0
%
Act
10
Option 4 wil
No extra benefit for Benefits to decrease
provide most
consumers with
under option 3 and
0
benefits to
complying
4 due to potential
Agree
Disagree
consumers
Participants
cost increase
Others
Consumers
Participants
Others
Consumers
Participants
A.15. Draft
The online survey showed consistent results to this theme. Most responses to the
online survey answered:
Information
(a) “Yes, but the other parts are also very important”, and
(b) “The Electricity Authority should commit now to making the full set of
Guidelines mandatory as soon as possible”.
A.16. Many consumers who emphasised making all Guidelines mandatory also suggested,
that if a staged approach is adopted, to include part nine (Fees and bonds) in the first
Official
stage of implementation.
The current Guidelines require significant improvement to become workable
the
A.17. Retailers consistently reported that the Guidelines require practical improvements to:
(a) enhance the clarity of the Guidelines and fix ambiguities and other
workability issues for retailers
(b) reduce inefficiency and unnecessary costs (which if made mandatory may
under
pass on additional costs to consumers)
(c)
increase protections to consumers.
A.18. Many industry participants supported having minimum standards of protections for
consumers, but insisted strongly that these must be workable to ensure those
protections can be delivered. Respondents provided detailed submissions outlining
what issues they currently see present in the Guidelines. Appendix B provides a
detailed list of issues raised by submitters on specific Guidelines.
Released
Retailers cannot estimate impacts of mandatory Guidelines without knowing what
changes will happen
A.19. We asked retailers to provide estimated costs to their business if the Guidelines were
made mandatory (either partially or in full). As shown in Figure 6, most retailers
generally responded that they would need to see a draft version of the updated
Guidelines before they could estimate any effects on costs. Retailers emphasised
that such estimations would depend on what option is progressed and are too varied
and uncertain to provide useful input at this stage.
A.20. One submitter expressed that they might expect higher costs should options three or
four be progressed, particularly for potential new entrants into the new market.
A.21. Noted already, but related to this specific question, retailers across all questions
voiced strongly for a collaborative approach between the Authority and stakeholders
when updating the content in the Guidelines to ensure a workable set of Guidelines. 1982
Figure 3: Q14.For retailers, broken down by Guidelines parts, what would the
estimated costs to your business be of codifying parts of the Guidelines under option
three or four (for example implementation and compliance costs)?
Act
100
ts 80
den
n
o
sp
of re
% Draft
60
40
20
0
Information
Need to assess on drafting
Expect to increase costs
Participants
Compliance monitoring requires substantial enhancement
Official
Respondents urge the Authority to publish data on the industry
the
A.22. Most retailers and consumer groups emphasise the Authority’s need to promptly
publish information and insights related to the residential electricity sector. Some
retailers noted that the 2022 – 2023 self-assessment reports have already been
submitted but are not yet published. These respondents also urged the Authority to
publish quarterly data on disconnections due to non-payment consumers.
under
A.23. Most retailers highlight that the currently released data is insufficient for an adequate
assessment of whether the Guidelines are achieving their intended outcomes. Some
think it may be premature to evaluate the Guidelines’ efficacy with only one year of
data.
Compliance monitoring will need to be resourced to ensure any updates to the
Guidelines can be enforced
A.24. Many respondents including retailers, consumers and others, stress the urgent need
Released
for improved and adequately resourced compliance monitoring to ensure the
Guidelines can be enforced if made mandatory.
A.25. A few respondents recommended that if certain parts of the Guidelines become
mandatory, the provision of monitoring information in part ten, should also be
mandated. These submitters viewed part ten as essential to ensuring making the
parts identified under Option 3 workable as a package.
A.26. Overall, consumers supporting the Guidelines becoming mandatory, either in full or
partially, raised that without effective compliance monitoring, the intended purpose
and outcomes of the Guidelines are at risk of never being achieved.
1982
Act
Draft
Information
Official
the
under
Released
1982
Appendix B
List of issues provided by respondents within scope of the Guidelines
Act
B.1. The table below provides an aggregated list from individual examples that some retailers provided as non-comprehensive lists of issues and
limitations t
Submitt
8
Indep
Draft
hat the current version of the Guidelines should address as part of the next steps.
B.2. This list is illustrative of the magnitude of the issues raised by retailers and the extent of the workability issues that need to be resolved.
Clause
er
Feedback
no.
endent In relation to Part 2, retailers should have a Consumer Care Policy and the Guidelines should prescribe what must be
Retailers
included in the Policy but, if mandated, it should be the retailer’s own policies and not drafted by the Authority e.g.,
clauses like clause 8 should not be mandated.
Information
11
Contact
Parts of clause 11 are highly prescriptive in the way retailers communicate with customers. While we achieve the
intent of these clauses there are often more efficient and customer centric ways to achieve the intended outcomes.
14
Contact
Parts of clause 14 are highly prescriptive in the way retailers communicate with customers. While we achieve the
intent of these clauses there are often more efficient and customer centric ways to achieve the intended outcomes.
Official
14
Independent Data collection: Clause 14(a)(ii) requiring Retailers to document “a customer’s preferred day(s) or the week to be
Retailers
phoned … and the time(s) within (those) day(s)” is too prescriptive and is information which, if relevant to the
the
customer at all, would likely become quickly out-of-date. The clause also does not appear to have any practical
function. While the Guidelines require this information to be recorded, there are no provisions for when it should be
applied e.g. what happens if the preferred day(s) don’t correspond with a 24 hour disconnection notice? This clause
should be deleted.
under
14(a)
Genesis
We do not agree that certain requirements under Clause 14(a), particularly with regards to how and when retailers
communicate with consumers and customers, result in improved outcomes for consumers, while they also add undue
costs for industry. We would therefore suggest they do not strike the right balance between protecting consumer care
(Principle A) and supporting competition and innovation and avoiding undue costs (Principle C). Specifically, we
Released
1982
would suggest removing the requirement to record a customer’s preferred day of the week to be phoned (14(a)(ii),
language preference (clause 14(a)(i i)), and requirement to record which communication methods are not suitable
(clause 14(a)(iv)).
Act
15
Contact
17
Contact Draft
Parts of clause 15 are highly prescriptive in the way retailers communicate with customers. While we achieve the
intent of these clauses there are often more efficient and customer centric ways to achieve the intended outcomes.
15(d)
Independent What practical function does recorded information on a customers “primary heating sources” serve (clause 15(d))?
retailers
Parts of clauses 17 are highly prescriptive in the way retailers communicate with customers. While we achieve the
intent of these clauses there are often more efficient and customer centric ways to achieve the intended outcomes.
Information
23
Mercury
Requiring retailers to advise every new post-pay customer of the existence of the retailer’s consumer care policy and
the retailer’s commitment to offer support if the customer faces payment difficulties is irrelevant in many
circumstances. Not all customers go into debt and even fewer get to the disconnection stage. It is not appropriate to
presume that a new customer will not pay their account. • We recommend this clause be amended to require retailers
to provide this information as appropriate.
24
ERANZ
Clause 24 – Retailers to consider financial mentoring when examining a credit history: This clause requires retailers
Official
to consider whether a potential new customers’ poor credit rating is countered by their active participation in financial
mentoring or whether it was the result of historic circumstances that have now passed. Satisfying both of these
scenarios involves asking highly personal questions which retailers must then make judgement calls on, well outside
the
their area of expertise. ERANZ recommends maintaining the principle Clause 24, but removing subclauses (a) and
(b).
24
Mercury
Clause 24 – Retailers to consider financial mentoring when examining a credit history. This clause requires retailers
to consider whether a potential new customers’ poor credit rating is countered by their active participation in financial
under
mentoring or whether it was the result of historic circumstances that have now passed. Satisfying these scenarios
involves asking highly personal questions and then asks retailers to make judgement calls which are well outside
their area of expertise. We recommend removing subclauses (a) and (b).
Released
1982
25
Genesis
We do not agree with Clause 25(a). It is unreasonable to expect retailers to have this information, and in any case
this information is freely available to consumers including through channels like Powerswitch (which retailers are
required to direct consumers to in most communications). - Clause 25(a)(i), which requires Retailers to provide
Act
consumers with whom they choose not to contract with information about other options generally available in the
Draft
market; We would argue they do not strike the right balance between protecting consumer care (Principle A) and
supporting competition and innovation and avoiding undue costs (Principle C). Genesis considers we are unlikely to
be alone in being reluctant to encourage our competitors to discuss our offers with their customers.
25
Contact
Clauses 25 and 31 require retailers to represent pricing plans available by competing organisations. This raises
considerable risk of mis-representing other organisations pricing and is better achieved by directing to PowerSwitch.
27
ERANZ
Clause 27 – Advising all new customers of arrears processes: Similarly to clause 23, requiring retailers to advise
every new post-pay customer of the process for unpaid invoices is unnecessary. ERANZ recommends retailers
Information
should have flexibility to only do this on a case-by-case basis, such as there are evident signs of hardship. As an
additional alternative action, retailers can advise of special conditions and support available when onboarding high
credit risk applicants.
27
Mercury
Advising all new customers of arrears processes Similarly to clause 23, requiring retailers to advise every new post-
pay customer of the process for unpaid invoices is unnecessary. Retailers should have flexibility to only do this where
Official
appropriate. • As an alternative action, retailers can advise of special conditions and support available when
onboarding high credit risk applicants.
the
28
Electric Kiwi
We don’t consider the Guidelines requirement (clause 28) that “the retailer should confirm with the customer that the
customer is aware of: … a. any cost differential between post-pay and pre-pay metering arrangements” or “b. that
when credit for the pre-payment service is used up disconnection
will occur” provides consumers, including vulnerable and medically dependent consumers, any meaningful
protection. under
31
Contact
Clauses 25 and 31 require retailers to represent pricing plans available by competing organisations. This raises
considerable risk of mis-representing other organisations pricing and is better achieved by directing to PowerSwitch.
Released
1982
31(b)
ERANZ
Clause 31(b) – Awareness of options generally available in the market: Retailers’ contact centre staff cannot be
realistically expected to have an accurate and up-to-date awareness of competitor options in the market that might be
more suitable. In addition, this requirement potentially introduces competition issues if competitors are expected to
Act
talk about other retailers. ERANZ recommends retailers should, if required, refer to price comparison tools generally
Draft
available in the marketplace such as PowerSwitch.
31(b)
Genesis
We do not agree with clause 31(b) (below). It is unreasonable to expect retailers to have this information, and in any
case this information is freely available to consumers including through channels like Powerswitch (which retailers
are required to direct consumers to in most communications). Clause 31(b), which requires Retailers, if a customer
enquires about changing their pricing plan, to make the customer aware of any other options generally available in
the market that might suit the customer’s circumstances better than the plans offered by the Retailer. We would
argue they do not strike the right balance between protecting consumer care (Principle A) and supporting competition
and innovation and avoiding undue costs (Principle C). Genesis considers we are unlikely to be alone in being
Information
reluctant to encourage our competitors to discuss our offers with their customers.
32
Genesis
Requires Retailers to proactively notify customers if they become aware a customer’s nominated alternate contact
person no longer agrees to act in that capacity. We do not think this requirement is helpful or reasonable, and we
think it fails to strike the right balance between protecting consumer care (Principle A) and supporting competition
and innovation and avoiding undue costs (Principle C). We therefore suggest either removing this clause, or
Official
narrowing the scope of this obligation to only apply to medically dependent customers
41
Independent
In relation to Parts 6 and 7, while we consider electricity retailers should have processes/systems to identify and
the
Retailers
assist customers having difficulty paying their bills, and provide reasonable warning of unpaid bills and potential
disconnection, we would caution against over-prescribing what these requirements should look like e.g., how many
days should be allowed for payment or what happens on day 24 after a bill hasn’t been paid (clause 41).
43
ERANZ
Rigid processes for customers in arrears: Clause 43 sets out a number of very detailed steps to follow when a
under
customer is in payment arrears. The steps are excessive in many cases, sometimes people fall into arrears because
they forgot to update their credit card details. Retailers should be able to tailor their approach to the situation and
what they know of the customer. It is not always appropriate, for example, to refer customers to support agencies
Released
1982
when they have forgotten to pay or just need to update a payment method. ERANZ recommends the Authority
engage with retailers on how to amend this clause so it is more appropriate and useful for customers.
43
Contact
Requires that retailers pause disconnection if majorita customer has contacted a support or social agency. We would
Act
Draft
like it clarified that we can seek confirmation from the support agency that this support has been sought and an
appointment booked. We note that this can only be done where the customer provides a privacy waiver.
46(a)
ERANZ
Monitoring increases and decreases in customer consumption: Many customers find their electricity retailer actively
monitoring their usage and then asking them why their usage has either increased or decreased to be highly
intrusive. As an alternative, retailers enable customers to view their usage data via website and mobile phone apps,
including usage comparison charts on customer bills. ERANZ recommends limiting this requirement to retailers
running high bill exception reporting and attempting to discuss potentially high bills with customers to prevent bill
shock.
Information
46(b)
ERANZ
Monitoring increases and decreases in customer consumption: Many customers find their electricity retailer actively
monitoring their usage and then asking them why their usage has either increased or decreased to be highly
intrusive. As an alternative, retailers enable customers to view their usage data via website and mobile phone apps,
including usage comparison charts on customer bills. ERANZ recommends limiting this requirement to retailers
running high bill exception reporting and attempting to discuss potentially high bills with customers to prevent bill
Official
shock.
46(d)
Genesis
Requires retailers to actively monitor increases and decreases in customer consumption, can be intrusive for
the
customers. We recommend changing this requirement so that it only applies for retailers running high bill exception
reporting and attempting to discuss potentially high bills with customers to prevent bill shock
57
ERANZ
High-cost communication methods: These clauses are the highest compliance cost clauses of the Guidelines, yet the
evidence of effectiveness is mixed. For example, the requirement to use in-person visits and signed courier letters to
warn of disconnections is costly, impractical, and ineffective – especially when customers are already unresponsive.
under
Signed courier letters are not a guarantee that the account holder has received the letter. In retailers’ experience,
letters are left in mailboxes, returned to sender, or refused to be signed for. ERANZ recommends the Guidelines do
not specify high-cost yet ineffective types of communications channels; instead retailers should be required to use
Released
1982
communications channels that either the customer prefers, has used successfully in the past, or can be proven to
have been received such as in-app messages with read receipts.
57
Contact
Clauses 57 require retailers to use a traceable form of contact. In our experience this is an expensive and ineffective
Act
Draft
way to engage with customers.
60(d)
ERANZ
Clause 60(d) – Advice on reconnection fees: This subclause requires retailers to detail all the charges a customer
would need to pay for reconnection if they are disconnected. There is little evidence providing this information early in
the process prompts action from customers. Retailers already include all such charges payable in later
communication attempts, but whether doing this early has an impact on payments is not clear because most
customers who are disconnected do not engage with their retailer. ERANZ recommends compulsory advice on
reconnection fees is to accompany the final disconnection warning only. Retailers can still include reconnection fees
elsewhere voluntarily.
Information
61(c)
ERANZ
Requiring on-site contractors to provide advice on budgeting support agencies: Many retailers instruct on-site
contractors not to provide advice to consumers on social support and budgeting services directly. This is because
retailers want to ensure this advice is of a high standard and therefore prefer to provide it through trained contact
centre staff instead. ERANZ recommends on-site contractors are instructed to advise customers to contact the
retailer and advise them on how to do so, so trained staff can provide high quality advice taking into account the
Official
customer's circumstances.
61(c)
Mercury
Requiring on-site contractors to provide advice on budgeting support agencies. Service providers are trained to
the
check the household for medically dependent customers prior to disconnection however they are not trained nor
qualified to give out budgeting advise. Service Providers work with several electricity retailers and to memorise the
specific offerings for each one is unrealistic. There would also be a risk factor attached to service provider
interactions with customers especially when it's not good news. • Instead, service providers are instructed to advise
customers to contact the retailer and advise them on how to do so, so trained staff can provide high quality advice
under
with consideration of each customer's circumstances.
61(c)
Genesis
Clause 61(c), which requires retailers to arrange for their on-site contractors to provide advice to consumers on social
support and budgeting services directly. We do not believe it is appropriate for third-party contractors to provide this
Released
1982
type of advice, particularly as it does not align with their capabilities or contractual role. We therefore recommend
changing this clause to require contractors to provide customers with retailer contact information if requested by the
customer so customers can be directed to customer service representatives with appropriate training
Act
64
Contact Draft
Clauses 57 and 64 require retailers to use a traceable form of contact. In our experience this is an expensive and
ineffective way to engage with customers.
64
ERANZ
High-cost communication methods: These clauses are the highest compliance cost clauses of the Guidelines, yet the
evidence of effectiveness is mixed. For example, the requirement to use in-person visits and signed courier letters to
warn of disconnections is costly, impractical, and ineffective - especially when customers are already unresponsive.
Signed courier letters are not a guarantee that the account holder has received the letter. In retailers’ experience,
letters are left in mailboxes, returned to sender, or refused to be signed for. ERANZ recommends the Guidelines do
not specify high-cost yet ineffective types of communications channels; instead retailers should be required to use
Information
communications channels that either the customer prefers, has used successfully in the past, or can be proven to
have been received such as in-app messages with read receipts.
66(c)
Child Poverty
The Guidelines have touched on aspects of energy hardship as examined by other institutes. However, the
Action Group
Guidelines tend to overlook the demographic disparity in energy hardship. Furthermore, the framing of customer’s
wellbeing should include their dependent children. Therefore, clause 66(c) concerning disconnections that may
Official
endanger the wellbeing of the customer should extend to the customer’s children. Currently, retailers measure their
own compliance of the Guidelines. Genesis Energy’s non-compliance was reported within the media . Other retailers
have taken an unacceptable position of refusing to engage with the Authority’s request for compliance reports. The
the
Authority needs to enforce compliance by making the Guidelines mandatory and track retailers’ compliance through
means outside of self-assessments such as independent audits.
66(d)
ERANZ
Ensuring a customer has “understood” notifications: Requiring a retailer to ascertain whether a customer
“understood” a notification re non-payment and disconnection is an impossible standard to meet. Practically, this is
under
only viable during a phone call by asking the customer whether they have understood. However, getting hold of
customers on the phone is often extremely difficult. Many customers prefer communication through apps, email, text
messages, postal mail, or courier letters – all of which cannot provide evidence of whether the customer has
“understood”. ERANZ recommends the wording “understood” is removed.
Released
1982
66(d)
Mercury
Clause 66(d) – Ensuring a customer has “understood” notifications • Requiring a retailer to ascertain whether the
customer “understood” the notifications re non-payment and disconnection notices is an impossible standard to meet.
Practically, this is only viable during a phone call by asking the customer whether they have understood. However,
Act
getting hold of customers on the phone is difficult at the best of times. Often, customers require communication
Draft
through apps, email, text messages, postal mail, or courier letters – all of which cannot provide evidence of whether
the customer has “understood”. • We recommend the words “and understood” be removed from this clause
72
Electric Kiwi
We also do not consider clause 72 of the Guidelines is in any way appropriate or consistent with the Authority’s
statutory objectives. Regardless of whether Part 7 is mandated this needs to be deleted.
73(a)(i) Child Poverty
The Guidelines have touched on aspects of energy hardship as examined by other institutes. However, the
Action Group
Guidelines tend to overlook the demographic disparity in energy hardship. Furthermore, the framing of customer’s
wellbeing should include their dependent children. Therefore, clause 66(c) and 73 (a)(i) concerning disconnections
Information
that may endanger the wellbeing of the customer should extend to the customer’s children. Currently, retailers
measure their own compliance of the Guidelines. Genesis Energy’s non-compliance was reported within the media.
Other retailers have taken an unacceptable position of refusing to engage with the Authority’s request for compliance
reports. The Authority needs to enforce compliance by making the Guidelines mandatory and track retailers’
compliance through means outside of self-assessments such as independent audits.
Official
75
Contact
Clause 75 states that pre-pay customers must be reconnected within 30 minutes after they purchase a credit. It
should be clarified whether this is 30 minutes after payment is confirmed by our bank, or if there is some other event
that starts the timer.
the
78
ERANZ
MDCs involved in deception - There is no method in the Guidelines for a retailer to deal with a customer who has
attained medically dependent status through fraudulent means, for example, forging a health practitioner’s signature,
or alleging that an MDC resides at the property when they do not. Additionally, the Guidelines are silent on a situation
where a retailer is onboarding a new medically dependent customer and performs a credit check only for the credit
under
check to return flags for fraud and deception.
ERANZ recommends the Guidelines more clearly state that medically dependent consumer protections are for
legitimate MDCs only who have a signed MDC authority from a medical practitioner.
Released
1982
78
Mercury
MDCs involved in deception • There is no method in the Guidelines for a retailer to deal with a customer who has
attained medically dependent status through lies or tricks such as forging a health practitioner’s signature, or alleging
that an MDC resides at the property when they don’t, etc. • We recommend the Guidelines more clearly state that
Act
medically dependent consumer protections are for legitimate MDC’s only.
79
Consu Draft
mer
In addition to the matters raised in our response to question 5, we consider the guideline’s wording relating to the
Advocacy
disconnection of MDCs needs to be strengthened. Clause 79 of the guideline states (emphasis added): Retailers
Council
should have and use processes and systems to request and record sufficient information on MDCs to make sure, as
far as practicable, that no premises at which an MDC permanently or temporarily resides are disconnected for
reasons of non-payment of a debt to the retailer. The inclusion of “as far as practicable” should be removed as it
conflicts with the wording of clause 66 (b) that places a clear prohibition on disconnection which is undermined by
clause 79
Information
82
Independent Clause 82(a) states that “Where an MDC who is not a customer, or an unverified MDC who is not a customer, has
Retailers
nominated: … a support person, the retailer should contact the MDC/unverified MDC directly”. This raises at least two
ambiguities: (i) when should the retailer contact the consumer rather than the customer?; and (ii) if the consumer has
nominated a support person why do the Guidelines specify that the retailer should contact the consumer rather than
the support person? The first question also applies to clause 82(b).
Official
84
Independent We do not consider it would be appropriate to try and place regulatory obligations on customers or consumers in the
Retailers
Guidelines such as that “Customers engage with retailers in good faith and respond to retailer communications, to
avoid or minimise non-payment issues” (outcome B(c)) and “the MDC needs to develop an individual emergency
the
response plan to use during any electricity outages” (clause 84).
88
Wellington
WELL also disagrees with the statement that “[implementation/operating costs would] be minimal if [distributors] are
Electricity
already aligned with the Guidelines” for clause 88. Any changes that mandate the provision of data currently not
Lines Limited provided would incur additional costs for both retailers and distributors, especially if the information is private and
under
confidential.
Released
1982
88
Independent Clause 88 is a matter that should be addressed in the Default Distributor Agreement not the Guidelines.
Retailers
Act
88
Electricity
Clause 88 asks distributors to not vary planned outage times without conferring with retailers first. This requirement is
Network Draft
s
manageable across most situations. However, in some situations, there are safety reasons for the crew on site to
Aotearoa
vary an outage end time because a job is taking longer than expected to be completed safely. Given the
unpredictable nature of some outage work, it is impractical to contact retailers before extending a planned outage.
This would require the work to stop while conferring with a retailer, ultimately extending the length of the outage
unnecessarily.
91
Independent For example, in relation to Part 8, most stakeholders would agree medically dependent consumers should NOT be
Retailers
disconnected for reasons of non-payment, but we consider requiring retailers seek verification of medical
dependence could harm consumers (including costing the consumer who may be suffering from hardship financially)
Information
if mandated and should be removed from the Guidelines (clause 91/91(b)(iv))
92
Genesis
Clause 92(a) and (b), which requires Retailers, when engaging with an unverified medically dependent Consumer
who is temporarily or permanently resident at premises for which the Retailer is not responsible under the Code, to
make reasonable attempts to determine who the Retailer is for the premises, advise the unverified MDC of the
Retailer’s name and contact details, and encourage the unverified MDC to contact the appropriate Retailer as soon
Official
as is possible. It is unclear when situations such as this would arise. Introducing a mandatory standard for what
appears to be a rare and narrow set of circumstances would disproportionately increase costs relative to its benefits.
Accordingly, assuming we are correct in concluding the situation this clause refers to is very rare, we think it fails to 6
the
strike the right balance between protecting consumer care (Principle A) and supporting competition and innovation
and avoiding undue costs (Principle C). We therefore would suggest removing this clause. We would also note that,
for all of the above issues, the need for clarification and direction is significantly greater should any or all of the
Guidelines be made mandatory.
under
97
Independent
Likewise, some forms of MDC are permanent. It would be insensitive and inappropriate to strictly follow the
Retailers
Guidelines and seek re-confirmation of MDC status potentially on an annual basis (clause 97).
Released
1982
101
Wellington
WELL also disagrees with the statement that “[implementation/operating costs would] be minimal if [distributors] are
Electricity
already aligned with the Guidelines” for clause 101. Any changes that mandate the provision of data currently not
Lines Limited provided would incur additional costs for both retailers and distributors, especially if the information is private and
Act
confidential.
101
Electricit
126(b)
Indep
Information
Official
Indepe
Compliance with the Consumer Care Guidelines should not be contingent on other guidelines or legislation otherwise
Retailer Draft
y
Modify clause 101 to require distributors to notify an MDC’s retailer of an emergency disconnection and oblige the
Networks
retailer to notify the MDC customer; or Exclude clause 101 from the codification.
Aotearoa
endent Clause 126(b) does not provide for the prospect that a retailer may not intend to fully comply with the VOLUNTARY
Retailers
Guidelines i.e. it requires retailers that are not fully complaint to provide “a plan and a commitment to achieve
alignment”. A retailer may choose to not fully align with the new Guidelines for various reasons, including because
the approach they adopt better protects consumer interests.
128
ERANZ
Clause 128 – Information requirements from retailers to the Authority Information disclosures to the Authority involve
a material amount of cost and effort on the behalf of retailers. Yet, there is little evidence of how this information is
used and little reciprocation of insights and intelligence from the Authority back to the retailers who supply the
information. ERANZ recommends the Authority regularly publish summary reports on the information it collects from
retailers.
111
ndent
s
retailers will be subject to double jeopardy/inefficient duplication of regulation/overlap between different regulators
the
e.g. clause 111 and the Fair Trading Act.
112
Contact
Clause 112 requires us to set Bond at a level that takes into account a customer's expected invoices. Meeting the
letter of this requirement would require us to obtain information on past invoicing information from the past retailer.
This wouldmake the switching process more complicated and slower. We do not consider that this is a good outcome
under
for consumers.
Released
Appendix C
Consumer Care Guidelines Annual
Alignment Statement Report 2022/23
1982
Act
Draft
Information
Official
the
under
Released
