5 Aug 2014

Grey Power membership surges

9:37 am on 5 August 2014

Advocacy group Grey Power has added thousands of new members by offering them a cheaper electricity scheme.

Grey Power Electricity, launched last September in partnership with a small supplier Pulse Energy, has grown quickly to nearly 10,000 customers, some as young as 30 after Grey Power relaxed its age limit.

In Dunedin, the Grey Power office signs up an average of three new members every weekday, with 500 new members in nine months - a rise of 66 percent.

Grey Power Otago president Jo Millar said most were joining for the Pulse Energy electricity deal, under which customers get a capped power price for five years allowing for price falls but no rises.

"We have people come in and say to us 'my next door neighbour has just told me she's joined Grey Power Electricity and she's saving X number of dollars a month'," Ms Millar said.

People were reporting savings of between a few dollars and $40 a month.

Steady, loyal customers

Pulse Energy chief executive Gary Holden said it was able to offer the deal because Grey Power members were steady, loyal customers who were more likely to pay their bills.

"Well many of these members had never switched before, and so we knew that it would be the kind of thing that once they did the analysis, made the comparison to their current offer, made the decision to switch, it was likely that they would stay as a customer, and so we reflected that in the price."

Grey Power electricity advisory group chairman Allen Davies said the scheme had been a great success but could easily have grown at twice the speed.

But Mr Davies said one problem was an industry practice called a save, in which a person who begins the process to switch companies was offered inducements, such as a $75 credit from their existing supplier not to leave.

Other members had been told misleading stories to scare them out of changing, and that was not on, he said.

"Hands off. When the person wants to change you let them change. After three months, when the person is settled in with their new retailer, if you've got a new offer, offer it to them, but make sure it's an offer that is generally available to everybody, not some under-the-table just to try and get them back."

Mr Davies is submitting this proposal to the Government's Electricity Authority, which has already proposed letting retailers choose to be protected from saves, in return for not engaging in the practice themselves.