Electricity user says offers rip-off, bribe

Mercury Energy is ''ripping off'' customers and trying to ''bribe'' back disgruntled customers, a Dunedin woman says.

The woman, who wanted to remain anonymous, said Mercury Energy supplied electricity to the small Dunedin business where she works until its two-year contract with the power company was due for renewal.

Mercury Energy emailed her that the contract would automatically renew and the price of electricity would increase so she researched other companies and decided to switch to Contact.

When Mercury Energy became aware of the impending switch it offered her a lower rate and a $200 ''good will'' credit.

The new rate was more expensive than Contact Energy and she declined the offer.

''I'm sick of electricity companies playing games. They should have offered me the better rate in the first place.''

Mercury Energy emailed her again and offered her a $500 credit and the same, lower rate.

The small business had paid its bills promptly and she was insulted Mercury had raised the price and then lowered it and tried to ''bribe'' her with a credit.

Electricity companies were ''ripping off'' customers with inflated electricity prices, she said.

A Mercury Energy spokeswoman said small business customers consumed about five times more electricity than residential customers and were offered larger credits than residential customers.

Offers and discounts are a sign of a highly competitive market at work and ultimately that's good news, that companies are competing vigorously for customers.

Mercury Energy reviewed its rates annually, she said.

Electricity Authority chief executive Carl Hansen said it was increasingly common for power companies to offer discounts and credits to retain customers.

Power companies were not overcharging customers, he said.

''The evidence we have is that the strong competition in the electricity market is forcing retailers to absorb cost increases, rather than pass these fully on to their customers.''

Authority analysis revealed the costs incurred by electricity retailers over the past three years increased 21.5% and the rates charged to customers in the same period increased 12.5%.

''Retailers have absorbed an estimated $190 million of costs since late 2010.''

Customers should shop around, he said.

''Shopping around doesn't always mean switching. Sometimes, it is very valuable to have a chat with your current power company and make sure that you are getting the best deal.''

shawn.mcavinue@odt.co.nz

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