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Putting our customers first

Energy hardship intensifies during a pandemic

During the COVID-19 pandemic and in the months and years of impact ahead, we’ll continue to put our energy and focus into supporting customers who experience financial hardship to keep the lights on and their houses warm.

While prices in New Zealand are pretty competitive and we have a competitive market, the cost is always too high if your house takes too much energy to heat and your income is low. Programmes like EnergyMate, which we help to fund through the Electricity Retailers’ Association of New Zealand (ERANZ), and the Government’s new $17 million fund for energy poverty, are essential to ensuring that the increased need for support for energy costs is met as the financial consequences of the pandemic unfold, exacerbating the already unacceptably high levels of energy hardship experienced in New Zealand. Australia has been similarly hit and is arguably in even more need due to the bushfires earlier this year and its ongoing battle to contain the spread of the virus.

Offering active support to those hit hard by COVID-19

With the onset of lockdown there was a significant shift in the types of electricity demand, and indeed the timing of peak loads, as businesses closed and people increasingly worked from home. Customers looked to us for assistance, particularly financially, as the effects of not being able to work took hold.

In New Zealand we offer our customers short- and long-term personalised payment options, no late-payment fees, offered account reviews, provide energy advice, and we’ve chosen not to disconnect customers. We also put customers on LevelPay to help them smooth their payments over the year.

We also implemented a programme to give relief to smaller businesses struggling to meet their payments because of COVID-19. The programme extended across our Meridian and Powershop brands and was offered to SME customers that reached out for help. Customers were offered up to $2,500 in credit depending on their annual consumption. The programme ended on 30 June 2020, and in total we gave out $400,000 in credit to around 450 business customers.

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Case Study

A major investment in KidsCan

We’ve supported KidsCan’s amazing work in communities throughout New Zealand for the past seven years.

A primary school girl is turning the bike wheel while smiling at the camera

In May 2020 we donated an additional $1 million to match the amount raised by generous Kiwis through the charity’s ‘19 for 19’ COVID-19 appeal. The additional support recognised the significant increase in the need for support among New Zealand communities through lockdown, and the expected impacts of COVID-19 on demand for KidsCan’s services. At the time KidsCan was already seeing a near 30% increase in demand for food support, meaning it was trying to help feed an extra 10,000 children every day.

KidsCan provides the essentials to children affected by poverty so they can participate in learning. KidsCan is levelling the playing field, giving children whose families are struggling the same opportunities to learn as anyone else. We partner with the charity to provide thousands of Kiwi kids with basics such as food, raincoats, shoes and socks and basic hygiene and healthcare items.

In February 2020, KidsCan and Meridian launched a pilot programme to empower play by providing 20,000 sun hats to more than 200 Decile 1 partner schools and more than 50 early childhood education centres throughout New Zealand.

Supporting customers in Australia

In Australia, we were already supporting customers when the COVID-19 pandemic struck, following the measures we’d taken in response to the ‘Black Summer’ bushfires. Our support programme for those affected by the bushfires included placing all bills on hold until further notice, offering a range of account payment help options, offering a hardship plan for those needing to access relief and covering the fees associated with connecting energy with Powershop at new or temporary accommodation.

Powershop donated $25,000 to Red Cross and $25,000 to the WWF bushfire appeals to support communities and wildlife. On 10 January 2020 we launched the ‘Power It Forward Powerpack’, allowing customers to support Powershop customers wanting to support those affected by the bushfires to do so, simply by purchasing power. The Power It Forward Powerpack included a 6.6c/kWh premium, which was pooled and credited (excluding GST) to the electricity accounts of customers in bushfire-affected communities.

We set a target of $150,000, which we hoped to achieve by the end of March 2020. In just five weeks, 12,500 customers raised $192,000. Powershop initially kick-started this fund with $20,000, bringing the grand total to $212,000. The funds went directly towards the bills of Powershop customers in 265 affected postcode.

The ongoing challenge of energy hardship

Power bills in New Zealand are the cheapest they’ve been in 11 years, down $156 per year for the average household after inflation since 2015, even though we’re using more power. Since 2011 in New Zealand there has been no real price increase for consumers arising from the competitive parts of the electricity supply chain (generation and retail).

However, job uncertainty and low-quality housing have increased concerns around affordability and staying warm in winter. As part of our commitment to affordable energy, we’ve responded by offering support to vulnerable customers in a range of ways. These are customers who’ve self-identified as financially vulnerable or struggle to pay their bills from time to time.

Our support includes a dedicated page on our website, regular communication, individualised support from specialist staff, tips to improve energy management and, where appropriate, introductions to budgeting advice services and government agencies such as Work and Income or the EnergyMate programme delivered through ERANZ.

We continue to focus on lowering our disconnection rates, and during lockdown adopted a policy of no disconnections.

New Zealand Disconnections *

New Zealand Disconnections chart New Zealand Disconnections mobile chart
NZ Average Powershop NZ Meridian

* data from the Electricity Authority (emi.ea.govt.nz/Datasets/Retail/Disconnections).
** FY19 restated with four quarters of data.
*** FY20 data only has 2 quarters of data from EA and therefore does not cover market behaviour during lockdown period.