2000 in Dunedin quit Contact

Contact Energy lost more than 2000 Dunedin customers in the same quarter it controversially hiked prices by more than 9%, the latest Economic Development Ministry electricity price survey suggests.

The city's most popular electricity retailer had 47% of the 52,364-strong market, or more than 24,600 customers, in the May quarter.

It announced the July 1 increase in June and ended August with 42% of the market, or about 22,480 customers.

Contact Energy spokeswoman Janet Carson yesterday confirmed the figures and acknowledged the increase could have prompted some customers to move.

Contact expected people to "re-evaluate their supplier" when prices went up, but just how many would move was unpredictable and often linked to factors other than price, she said.

The Otago Daily Times asked whether those other factors might include the political pressure that accompanied the increase, but comment was not forthcoming yesterday.

Prime Minister John Key warned companies not to use the emissions trading scheme (ETS) as an excuse for price increases when he learned of Contact's review in June.

Contact said it was actually two increases: a Dunedin-specific 6% to reflect the cost of generation and supply, and a nationwide 3.2% to meet the costs of the ETS.

That was less than the up to 5% increase Climate Change Minister Nick Smith expected the ETS to add to prices, but enough for Energy Minister Gerry Brownlee to tell Dunedin consumers to shop around.

According to the ministry's figures, the increase maintained Contact's position as having the most expensive average electricity price per kilowatt hour in Dunedin, assuming the average customer on a low-user rate uses 8000 kilowatt hours a year. Even so, it remained twice as popular as its nearest rival.

Mercury Energy increased its market share from 17% to 21%, even after announcing a 3.3% ETS increase, while TrustPower dropped to third when its share fell from 22% to 20%.

TrustPower recently announced a 5.6% increase for October 1, when the new GST rate will push the actual rise to 7.9%.

- stu.oldham@odt.co.nz


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