Power companies resume disconnections again

Wednesday, 27 May 2020

During lockdown electricity companies temporarily stopped all disconnections for non-paying customers, but with lockdown over the disconnections are starting again.

Some big power companies have ended the no disconnections policy they brought in under lockdown.

Contact Energy and Mercury have both resumed disconnections, while Genesis and Meridian said they were both considering when to bring them back.

Tim Barnett, chief executive of Fincap, which provides supports for dozens of budgeting services around the country, was disappointed by the move, and said power should be an absolute right for households.

'For the foreseeable future, for the recession in which there will be a very high level of hardship, having access to power is a fundamental right,' Barnett said.

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The power companies said disconnections were a last resort, and pledged not to disconnect households in financial distress which engaged with them.

But Barnett felt power companies resuming disconnections was not appropriate as job-losses mounted, and many households had suffered income drops, and faced high levels of uncertainty.

'Within a few months, they are trying to return to business as usual,' he said.

Barnett said along with rent and food, power was an absolute fundamental of life, and power companies needed to work with politicians and support agencies like budgeting services to come up with plan to ensure disconnections did not take place.

'Now we are getting out of the lockdown, each power company will be considering their approach to disconnections under the new normal,' said Cameron Burrows, the chief executive of the Electricity Retailers’ Association of New Zealand.

Throughout level 4 and level 3 lockdown there were no disconnections, Burrows said, and he felt sure no power company would disconnect a customer who was talking with their power company about their difficulties.

Lopa Muliaga, the husband of Folole Muliaga, fought for change after her death.

'If you are talking, and you have got a plan, then there wouldn't be a disconnection,' Burrows said.

He was also hopeful that taxpayer-funded winter energy payments- which were made automatically to people getting certain benefits including New Zealand superannuation, veteran's pension and jobseeker support would ease power-bill pressure on many struggling households.

People with dependent children who qualified could get up to $63.64 a week.

Before Covid-19 hit the economy there was an average of around 2000 disconnections a month, though Barnett said around a third were short-term, with households making payments to power companies to get the power turned on the next day.

During lockdown, the Electricity Authority asked all electricity companies to treat any customer being considered for disconnection as 'vulnerable'.

Friends, family and local residents gathered to mourn the death of Folole Muliaga whose respiratory machine was turned off when Mercury Energy cut the power to their property because of unpaid bills. Prime Minister Helen Clark, pictured with Folole's husband Lope Muliaga, paid her respects.

A vulnerable customer was someone who relies on electrically-powered medical devices to stay alive.

The designation went back to the death of Folole Muliaga in 2007, who died when Mercury Energy cut power to her home because of an unpaid bill of $168.40, leaving her unable to operate the oxygen machine she relied on.

Her death caused national outrage, prompting change in the electricity industry, and prime minister Helen Clark to attend Muliaga's funeral.

Power companies said they had reviewed their disconnection policies, and they were now more lenient than before Covid-19 struck.

Mercury's general manager of retail Kevin Angland said: 'We have recommenced our debt management, including our collection process after pausing it on March 23.'

But, he said: 'We will not charge late payment fees, nor disconnect impacted customers if they reach out to us and stay up to date with agreed flexible payment arrangements.'

Tim Barnett, former Labour MP, and now head of the Fincap network of budget agencies, says there needs to be a national discussion around electricity disconnections.

Mercury, like other power companies, had been offering customers in difficulty greater flexibility around payments, including coming up with individual payment plans, and deferring the payment of amounts owed.

Contact Energy spokesman Paul Ford disconnections had been reintroduced when the country moved out of level 3.

Before any disconnection happened, however, Contact send multiple letters, and text messages, and made multiple calls to customers to attempt to sort out payment options.

'Disconnection is very much a last resort, and will only occur where all other options have been exhausted,' Ford said.

Genesis spokeswoman Kiely Evans said: 'As part of our customer care package in response to Covid-19, we paused all disconnections.'

But, she said: 'We are reviewing when we resume these.'

Disconnections were a last resort, she said.

'We recognise customers are facing extraordinary circumstances so are providing extra leniency and support.'

'Customers who have let us know they’re in hardship, are medically dependent or otherwise vulnerable, customers that are making payments and staying in contact with us, should not be worried about disconnection in these times.'

Merdian spokeswoman Polly Aitkins said: 'Meridian is encouraging all of our customers who have been impacted by Covid and struggling to pay their bills to get in touch.

'We will work with them to find a payment solution that suits them and make sure their power isn’t unfairly disconnected. We are also currently not charging any late payment fees or credit reminder fees to our customers.'