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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.

As I have mentioned previously the Powershop Crew enjoy giving me a ribbing about being geeky, particularly since I have become a more active (but still an amateur) twitterer.  Despite this I have become a convert, so much so that I set up a twitter account for Powershop - I haven’t mentioned this to the crew, I’ll be interested to see how long it takes them to discover

Anyway, you can keep abreast of Powershop through short, but extremely insightful bursts of information by following @powershop