26 May 2013

Power company disconnections rising again

6:17 pm on 26 May 2013

The number of households disconnected by power companies is rising again.

The numbers dropped after a woman died when household power for an oxygen machine was turned off by Mercury Energy in 2007. Folole Muliaga died less than three hours later.

Energy analyst Molly Melhuish said some 35,000 disconnections were being made per year until Ms Muliaga's death, when disconnections fell to about one fifth.

New rules were put in place, which meant power companies could not disconnect medically-dependent consumers.

But Mrs Melhuish says there has been a progressive increase in disconnections since mid-2008 to what they were before, and she expects they will continue to rise.

Almost 41,000 residential power disconnections were made due to non-payment last year - 10,000 more than in 2011, according to figures issued by the Labour Party.

Economist Geoff Bertram says power prices rose five times faster than inflation last year.

He expects disconnections to peak in the next few months.

Mr Bertram says as households move into energy poverty they may have to choose between keeping the house warm and feeding the children.

"Some households are going to have to choose feeding the kids above keeping them warm and from that flows disconnections."

Contact Energy says it takes its obligation to help low-income customers seriously and acts according to industry guidelines.