A full moon rises over transmission pylons at Three Mile
Hill, near Dunedin. Photo by Stephen Jaquiery.
Start-up Otago electricity retailer Payless Energy is on
the cusp of signing up its 200th customer, having extended
services beyond Dunedin into Central Otago during December.
With just under 200 customers, as of this week, the
Mierzejewski family-owned company is a minnow in the ocean of
electricity retailers, but is at present sticking to
''word-of-mouth'' referrals to keep its growth plans on
Since its launch in July last year, with just 13 customers,
Payless Energy has been rated as the cheapest of nine
retailers in the Dunedin area.
Its all-inclusive overall electricity and fixed line costs
for residential users is 19.8c per kilowatt hour, Payless
finance director Radek Mierzejewski said yesterday.
Payless' competitors' rates, as at November, started at
21.94c with Nova Energy and rose to the highest at 26.36c
with TrustPower, according to recent comparison data of the
Electricity Authority, released by the Ministry of Business,
Innovation and Employment.
Payless uses Dunedin City Council-owned Delta for meter
reading, in tandem with transmission company Aurora, and with
standing agreements already in place with Aurora was able to
move into Central Otago as a ''natural expansion'', he said.
Although modest in numbers, Mr Mierzejewski said Payless now
had customers in Alexandra, Cromwell, Queenstown, Frankton,
Clyde Alexandra and Wanaka.
Payless, with its four person all-family staff, buys
electricity on the daily spot market and makes its savings in
keeping overhead costs to a minimum.
Staff are on ''quarter salaries'' during the start-up period
and the company has no marketing campaign under way.
''Given the volatility in the spot market ... we have to
cover the [spot market] fluctuations in the business, which
is why we are being cautious,'' Mr Mierzejewski said about
the company signing up 20 to 30 customers a month, and not
targeting more at this stage.
He wanted Payless to be sustainable, in that the risk lay in
Payless at times having to buy spot market electricity at $1
per kilowatt-hour, while the electricity to its customers was
charged at 16c per hour.
In December the customer base grew by 13 to 147, then in
January rose by another 38.
''It's really starting to pick up and we are getting a lot of
referrals, by word of mouth,'' Mr Mierzejewski said.
He said the ''band'' of kilowatt charges by the big retailers
was very similar, given they ''spent millions'' on
advertising campaigns, which was a cost later passed on to
customers, as were big head office costs and large staff
''By July [launch anniversary] we'd like to be recognised as
the local supplier, and be seeing our client base growing,''
Mr Mierzejewski said.