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Media release - 1 February 2010

New Zealand businesses could potentially save millions of dollars a year by switching to a better value electricity supplier, according to Powershop.

Powershop, which sells electricity over the internet, discovered a pricing anomaly when they started doing bill estimates for companies interested in getting a better deal.

Based on more than 300 nationwide businesses Powershop prepared estimates for, they calculated Auckland businesses could save an average of eight percent, Wellington businesses nine percent, Christchurch businesses 17 percent and Dunedin businesses an average of 24 percent off their current annual power bill.

Powershop Chief Executive Ari Sargent says there is no good reason businesses are paying too much for their power.

“We’re shocked at how much some businesses are paying. The hundreds to thousands of dollars that many smaller businesses are overpaying should be profit, not filling the already well-padded pockets of big power retailers,” Mr Sargent said.

Mr Sargent believes the practice of charging the business sector overly high prices began decades ago.
“Historically, when the electricity market was managed by regional power boards, local councils would hike up power prices for businesses to subsidise residential customers. This practice ended in the nineties but the relative lack of competition means, in our opinion, power companies are getting away with charging businesses more than they should.

“Rather than working out the wholesale price of a unit of electricity and adding a reasonable margin, it appears that power companies are starting at a historically high figure and then only going lower if pushed by customers or competing power retailers,” Mr Sargent said.

Don Peebles of Peebles Owen Group, which runs four petrol stations in Christchurch and employs around 50 people, has recently switched to Powershop and expects to save around $15,000 over the next year, a quarter of their current annual power bill.

“We’ve always paid a lot for electricity but I was blown away by how much we were being overcharged. We’ve had enough of other power suppliers overpromising and underdelivering. It’s about time electricity prices became more competitive,” Mr Peebles said.

The Frenzi Group in Auckland, owner of several restaurants and bars including De Fontein, The Occidental, The Ponsonby, De Post and Malt, has recently switched to Powershop. Director Roy Thompson said they expect to save around $23,235 a year across the five venues, a 20 percent saving on their current annual power bill.

“We use a lot of power, running all our kitchen, refrigeration, lighting and audio-visual equipment. Each year many of our operating costs rise relentlessly yet we are unable to pass these savings on to our customers. Our margins are continually squeezed.

“If Powershop deliver on their savings estimates, then we will benefit from some very helpful savings,” Mr Thompson said.

Powershop has already proven it saves residential customers money. In the Government’s quarterly survey of domestic electricity prices, Powershop was shown to be the cheapest electricity supplier in Auckland, Wellington, Christchurch, Dunedin, New Plymouth and Palmerston North. (see http://www.med.govt.nz/templates/MultipageDocumentTOC____39087.aspx)

“We’ve used the Internet to fundamentally change the way people relate to electricity and to their power company. The internet allows us to keep costs low and lets businesses control how much power they use and keep an online record of all their bills” Mr Sargent said.

* Powershop has recently been achieved the highest customer satisfaction ratings in a survey by Consumer http://www.consumer.org.nz/reports/energy-providers/introduction

This blog post previously contained the Powershop Media Release (that has already been widely reported) outlining some of our views on the proposed electricity industry reforms. Meridian Energy, the sole owner of Powershop, has requested that we remove this statement because, despite Powershop’s operational independence from Merdian, some media and commentators reported or interpreted our position as being Meridian’s position on these reforms - this is not the case, our stated position is solely our own.

The Ministry of Economic Development has today officially named Powershop.co.nz as cheapest electricity supplier to Auckland, Wellington, Christchurch, Dunedin, New Plymouth and Palmerston North in its Quarterly Survey of Electricity Prices.

Powershop.co.nz CEO Ari Sargent says the news was proof that Powershop.co.nz’s low cost business model offered the best deal for consumers.

“It’s all about keeping costs low. The internet is our head office and the rent for a web address isn’t nearly as much as a flash high rise building. We’re small and everything we do, we do to save our customers money,” he said.

Simon Lawrence Manager of Energy Information at the Ministry of Economic Development (MED) encouraged electricity consumers to look at their options.

“The MED encourages people to shop around and Powershop can offer customers good savings compared to other retailers,” Mr Lawrence said.

Mr Sargent said that Powershop’s ability to deliver the cheapest electricity in New Zealand was a testament to the power of increased retail competition

“It’s a simple equation - more competition always creates cheaper prices for consumers. The more small, low cost retailers like Powerhsop that you can get into every market, the cheaper prices will be,” he said.

Mr Sargent said the key to making it easier for new retailers to enter the market was making it easier to buy forward hedge contracts from generators on the wholesale market. Powershop is unusual among power companies as a pure play retailer. Almost all other electricity retailers are also power generators.

“The liquidity of hedge contracts on the wholesale market is the single largest factor determining the level of competition in New Zealand retail electricity markets. If they were easier to buy and sell there’d be more competition from small companies like us and cheaper prices for consumers,” he said.

Mr Sargent said he hoped that the Electricity Market Review currently being undertaken by the Ministry of Economic Development would address this issue.

To read the Quarterly Survey of Electricity Prices, visit MED - Quarterly Survey of Domestic Electricity Prices

The Sunday Star Times this morning (6 September 2009) again features an article about electricity - Flick the switch and save packet.

We fully endorse the claims made by reporter Lois Cairns that “Thousands of kiwi homeowners are still paying more for their power than they need to and could save money simply by changing their electricity supplier”. In fact they are very similar to words we ourselves have been using for some time.

Hunting out a good deal

Hunting out a good deal isn’t difficult and switching is really easy and painless.

Consumers Institute has a great website resource (www.powerswitch.co.nz) for electricity users to find out what options are available in their area, and will highlight the cheapest supplier.  Unfortunately, Consumer has set up powerswitch to compare traditional tariff options and as yet have been unable to incorporate Powershop directly into their calculations due to our simplified pricing structure. This is a real shame because Powershop is currently the cheapest supplier in many areas. We are currently working with Consumer to help them incorporate Powershop directly the powerswitch.

In the meantime we suggest that customers either use the Powershop savings calculator or if you prefer use the independent advice from Consumer to help you find the cheapest option for you (beware of any special conditions from retailers) and then use our savings calculator to compare estimated annual costs between Powershop and the cheapest option recommended on powerswitch.

Once you have decided the best option for you, whether that is Powershop or someone else, switching is generally a simple matter of contacting the new retailer and providing them with the information they need. The switch itself may take a few weeks to complete, but there will normally be nothing else that you will be required to do, and there won’t be any disruption to your normal service during the transfer.

Powershop has made the switching process even more painless for our customers, because:

- it can all be done online (and we’re only a phone call away if you need help)
- we do not do credit checks, and we do not require bonds from our customers
- we keep you informed during your transfer so you know what is going on
- we offer a 60 day guarantee, if you are not happy during this timeframe we will help you transfer back to your old supplier and refund any unused power - no quibbles.

So why not exercise a bit of buying power - spend 10 minutes checking out the best option for you, and if there is a better deal out there for you, grab it! Switching electricity retailer is not a life changing decision - it is easy and you can always change again if you are unhappy with the service or price of your new retailer. We’d love to have you as a Powershop customer, but even if we’re not for you, you owe it to yourself to check out if you can get a better deal.

Media Release - 24 August 2009

Online electricity retailer Powershop.co.nz is slashing weekend power prices in Canterbury. Most Powershop customers will save at least 20% from current prices for power used in the weekend between 7am and 9pm.

Powershop.co.nz Chief Executive Ari Sargent says his company is serious about changing the electricity market.

“To hell with the incremental price games the other power companies play. We want to change the game and do everything we can to help the power consumers of New Zealand get a better deal. What we’re doing in Canterbury isn’t a one-off special either. It’s a permanent feature of Powershop,” he said.

The cheaper weekend deal is open to any of Canterbury households with a smart meter who are customers of Powershop.co.nz. The offer is available on most of the Orion network – between the Rakaia and Waimakariri Rivers.

The deal involves Powershop rebating 5c/kWh for power used at the weekend, between 7am and 9pm. Mr Sargent said the weekend was when most families used the most power and he hoped the move would help Canterbury families slash their power bills.

“We want you to relax about your power bills when you’re on weekend family time. And if you really want to save money - save your energy-hungry chores like the laundry until the weekend,” he said

Mr Sargent said that the cheaper weekends wouldn’t be possible without the Canterbury lines company Orion.

“Orion are the most forward thinking lines company in New Zealand. They’ve made this deal possible. Cantabrians have a lot to thank them for,” he said.

Mr Sargent said that Powershop.co.nz wanted to offer similar deals in other markets, but that required a willing lines company and smart meters.

“We’d be launching this all over the country if we could and we have already initiated negotiations with other lines companies to provide better deals to our customers.” he said.

Anyone wishing to take advantage of the 20%-off weekend daytime offer should visit Powershop.co.nz

The front page headline of the Sunday Star Times (July 12, 2009) claims that “Customers win big in power wars”.  We have a different view.  We think that power customers are being betrayed and the vast majority of customers are losing out.  The “win-back” practice of other power companies is benefiting only select customers at the expense of all customers.  To offer a departing customer $200 or more to stay is wasteful, silly and ultimately unsustainable, but what’s worse, we think it is outrageous that these companies are rewarding their disloyal customers (those who have chosen to leave) at the expense of their loyal ones.

Powershop is founded on the principle of bringing competition to the retail marketplace.  We see a selective but aggressive customer poaching practice as a deliberate attempt by power companies to subvert true competition - rather than put their best offer on the table, they are using the profits they make from other customers to bribe a select few customers back.  These win-back offers also most often come with hooks (there is no free lunch) such as being locked in for a fixed term.  And don’t be fooled by “price freezes”, wholesale prices are picked to stabilise or fall in the near term (primarily due to increased capacity coming on stream and reduced demand with the slowing economy).

People.  It is time to exercise some consumer power, let your voice count.  Here’s what you should do. SWITCH POWER COMPANY NOW.  You have nothing to lose.  Here’s what you stand to gain if you switch now:

- you learn how easy and painless it is to switch. You don’t need to feel trapped with your current company ever again.
- in most cases you can get a better deal.
- you may get an attractive offer to stay with your current company (if you are comfortable with it, take it while you have the chance).

There truly is nothing to lose. Even if you don’t think Powershop is for you, seriously think about changing power company anyway (we’d love you to give us a chance though).

Switching to Powershop only takes 5 minutes and can all be done online.  All you need is your address and either bank account or credit card details (other details off an old power bill are handy but not essential). Get started here.

Power to the people!

Media Release - 26 June 2009

Smart meters are only smart if the people using them are fully informed about their benefits, according to Powershop chief executive Ari Sargent.

Mr Sargent echoed claims from the Parliamentary Commission for the Environment (PCE) that past and current smart meter installation programmes are short-sighted and have not passed on savings to consumers.

“Everybody knows New Zealanders are paying more for their electricity than they need to. Power companies have kept consumers in the dark. Introducing smart meters hasn’t changed that.

“As a consumer you have the right to know how much power you use every day and choose how you manage and pay for it,” Mr Sargent says.

The technology is already available in New Zealand today to do this via the Internet. Powershop.co.nz, the world’s first online electricity store, allows consumers to regularly keep track of their usage, so they have an understanding of how much electricity they are using and when usage is greatest.

“People are smarter than a smart meter and can make the right choices if they have the right information,” Mr Sargent said.

The debate around the use of the Home Area networks (HAN) to control appliances was a red herring, Mr Sargent said.

“The smart one in this equation isn’t an electricity meter that turns off appliances at certain times, it’s the person. It’s people who make decisions about how and when to use power. Home networks are several years away, and consumers are missing opportunities to use power wisely today.

“Powershop is about providing information to consumers that they can understand and that’s meaningful, so they can make smart decisions for themselves.”

Powershop also offers consumers the ability to choose, and switch between competitively priced electricity products to get the best deal for them, rather than being tied to a single provider.

Mr Sargent said in the coming weeks Powershop would be releasing a new product that demonstrates how smart meters can deliver real benefits to consumers.

Media Release

Powershop, the world’s first online electricity shop, was launched today ushering in a revolution in the way New Zealanders buy their electricity.

Most New Zealanders are paying more for their electricity than they need to. Powershop.co.nz offers an easy way to access a range of competitively priced electricity products from a number of providers all available on a single website, Powershop chief executive Ari Sargent said.

“The age of being tied to a single power company is over. Powershop is the retail electricity revolution everyone has been waiting for since the electricity market was deregulated,” Mr Sargent said.

Real choice for the first time

“For the first time consumers can buy their power in the same way as they buy groceries. Powershop offers real choice and the ability to compare products, just as you can in a supermarket,” Mr Sargent said.

“You can buy products from different suppliers without having to worry about switching between them because you are buying your electricity through Powershop,” Mr Sargent said.

Real control to help you use less power

Powershop helps consumers reduce power consumption by providing tools to actively monitor and manage their power use, Mr Sargent said.

“At Powershop you can regularly keep track of your usage, so you develop a close understanding of how much electricity you’re using and when your usage is greatest. That means you can take steps to use less power and see the results immediately.”

“If you forget to buy power in time, Powershop will automatically buy more power using your preferred payment method to ensure you won’t run out,” Mr Sargent said.

Tools to help you save money

Powershop customers can buy electricity ahead to help them manage higher winter power costs. As well, they will be able to take advantage of special deals that will arise from having a competitive electricity market place.

“Because Powershop customers are paying for power as they go they know how much they are using and there’s no unexpectedly high power bills at the end of the month,” Mr Sargent said.

“Powershop provides the opportunity to save power, save money and if you want help save the planet by being a more conscious energy consumer,” Mr Sargent said.

The revolutionary new website will also open up opportunities for companies from outside the energy industry to start selling power, further increasing the competitiveness of the electricity market.

“The Internet has transformed the way we shop for everything from music to airfares and now we are harnessing the power of online shopping to radically shake up the electricity market. For the first time we are giving the power back to electricity consumers,” Mr Sargent said.

To find out more about how Powershop works visit www.powershop.co.nz and watch the online demonstration.

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